Bruker Corporation ( BRKR Quick Quote BRKR - Free Report) scaled a new 52-week high of $75.82 on Jun 16, before closing the session marginally lower at $73.99.
The company’s shares have charted a solid trajectory in recent times, appreciating 79.3% over the past year, ahead of 69.9% growth of the
industry it belongs to and 38.5% rise of the S&P 500 composite.
The company is witnessing an upward trend in its stock price, prompted by solid growth potential of CALID Group. Moreover, Bruker’s MALDI Biotyper is witnessing increasing demand, which is encouraging. Further, the raised 2021 guidance boosted by the solid first-quarter performance instills investors’ confidence in the stock. However, stiff competition and forex woes are concerns.
Let’s delve deeper.
Key Growth Drivers CALID Group Holds Potential: Bruker’s CALID Group has been making decent progress of late. The growth in CALID Group revenues during the first quarter of 2021 reflected strong demand for life science mass spectrometry and FTIR/NIR/Raman molecular spectroscopy products. Further, the company recorded robust order and revenue growth for its timsTOF unbiased 4D proteomics platform along with improved demand for other mass spec products. High Potential of MALDI Biotyper: The demand for Bruker’s MALDI Biotyper is increasing in applied markets, specifically for food, feed and beverage. Based on the recent developments witnessed in this product portfolio, management believes Bruker is poised to double its microbiology business over the next four to five years. Given an increase in the aging population, a higher number of individuals are likely to fall prey to illnesses, especially those caused by microorganisms. We believe MALDI Biotyper is thus positioned well to contribute significantly to the company’s top line over time. Image Source: Zacks Investment Research Raised Guidance: Investors are upbeat about Bruker’s raised 2021outlook boosted by its strong first-quarter performance.
For 2021, Bruker expects revenue growth of approximately 14-16%, up from the previously issued guidance of 11-13%. Organic revenue growth is projected within 11-13%, up from the earlier guided range of 7-9%.
The company expects full-year adjusted earnings per share in the band of $1.82-$1.87, indicating an uptick of 35-39% from the 2020 reported figure (up from the previous expectation of $1.72-$1.77.
Downsides Exposed to Currency Movement: Bruker conducts 80% of its business in international markets. Thus, currency fluctuations continue to result in foreign currency transaction losses. Competitive Landscape: Bruker faces substantial competition in a consolidating industry and expects competition in all markets to increase further. Bruker BioSpin competes with companies that offer magnetic resonance spectrometers, mainly JEOL and Oxford Instruments. In the field of preclinical imaging, Bruker BioSpin faces competitive threat from Perkin Elmer, Mediso, Trifoil, MR Solutions, RS2D, Visualsonics (Fuji Film) and others. Zacks Rank and Key Picks
Currently, Bruker carries a Zacks Rank #3 (Hold).
A few better-ranked stocks from the broader medical space are
National Vision Holdings, Inc. ( EYE Quick Quote EYE - Free Report) , Envista Holdings Corporation ( NVST Quick Quote NVST - Free Report) and Phibro Animal Health Corporation ( PAHC Quick Quote PAHC - Free Report) . While National Vision sports a Zacks Rank #1 (Strong Buy), Envista Holdings and Phibro Animal Health carry a Zacks Rank #2 (Buy). You can see the complete list of Zacks #1 Rank stocks here.
National Vision has an expected long-term earnings growth rate of 23%.
Envista Holdings has an expected long-term earnings growth rate of 26%.
Phibro Animal Health has a projected long-term earnings growth rate of 11%.
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