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Bruker Rides on PCI Sales, Coronavirus-Led Supply Issues Hurt

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On Jun 2, we issued an updated research report on Bruker Corporation (BRKR - Free Report) . The company’s recent acquisition and collaborations are a strategic fit. However, currency fluctuations remain a drag. The stock carries a Zacks Rank #3 (Hold).

Over the past six months, Bruker has underperformed the industry it belongs to. The stock has lost 11.8% compared with the industry’s 0.9% decline. Bruker  came up with lower-than-expected results for the first quarter of 2020.

Bruker has been affected significantly due the coronavirus pandemic. The company’s first-quarter 2020 results reflected decline in both reported and organic revenues, primarily due to COVID-19-related disruptions, including approximately 30% year-over-year revenue decline in China. This resulted in year-over-year fall in the company’s GAAP and non-GAAP operating income, operating margins and earnings per share.

Although Bruker anticipates a rise in sales within life science, biopharma and basic medical research, as well as in infectious disease diagnostics due to the pandemic, a pronounced year-over-year revenue decline is likely to be registered in the second quarter of 2020. The company has refrained from providing any guidance for 2020 amid the mayhem.

The contraction in both margins is concerning as well.

We are, however, upbeat about the company’s focus on product development on higher R&D investment. Potential of Nano Group, PCI and the MALDI Biotyper buoys optimism.

In the reported quarter, Bruker received an extra 25 MALDI Biotyper orders from China, including orders from its Centers for Disease Control and Prevention (CDC) labs. This is particularly notable as the MALDI Biotyper is important for ruling out or identifying bacterial, respiratory or other non-viral infections. Also, in the first quarter, Preclinical imaging (PCI) revenues increased year over year on the back of favorable delivery timing early on.

Further, Bruker has been making notable efforts to combat the coronavirus crisis. In Bremen, Germany, Bruker is currently offering a pilot COVID-19 at-work testing program for its factory workforce. The company is also providing critical technologies and solutions to help fight the crisis. The microbiology and infectious disease diagnostics portfolio has added a SARS-CoV-2 PCR test and the NMR and mass spec systems, which are used in critical disease, therapeutic and vaccine research.

Key Picks

Some better-ranked stocks from the broader medical space are Aphria Inc. , Illumina, Inc. (ILMN - Free Report) and QIAGEN N.V. (QGEN - Free Report) .

Aphria’s long-term earnings growth rate is projected to be 24.6%. It currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Illumina’s long-term earnings growth rate is estimated to be 11%. The company presently carries a Zacks Rank #2.

QIAGEN’s long-term earnings growth rate is estimated to be 12.2%. It currently carries a Zacks Rank #1.

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