Here's Why You Should Hold PerkinElmer (PKI) Stock for Now

PerkinElmer Inc. PKI is expected to gain from a broad spectrum of products and acquisitions. Meanwhile, foreign exchange headwinds plague the company.

Over the past year, shares of this Zacks Rank #3 (Hold) company have rallied 29.2% compared with the industry’s 22.2% rise. The current level also compares favorably with the S&P 500 index’s 4.8% rise.

What’s Favoring the Stock?

Wide Range of Products

PerkinElmer delivers a comprehensive suite of scientific informatics and software solutions.

The company’s products include the industry-leading ChemDraw software, Electronic Lab Notebooks, including cloud-based Elements SaaS Offering and enterprise E-Notebook Solutions, along with the TIBCO Spotfire platform for scientific data analytics.

There has been a latest development of assays for Zika, Dengue and Chikungunya viruses using the company’s dried blood spot technologies as well as rapid lateral flow tests created by combining EUROIMMUN's antigen capabilities with lateral flow technologies from Tulip.

Acquisitions

Acquisitions and strategic partnerships have been key catalysts for PerkinElmer over the years. In recent times, PerkinElmer completed the acquisition of DANI Instruments in Italy. Per management, this tie-up will help accelerate workflow solutions in food, pharma and environmental end markets.

In the last reported quarter, the company announced the buyout of Cisbio Bioassays — a leading custom assay service provider. The addition of Cisbio strengthens PerkinElmer’s position in the life sciences and diagnostics markets.

It is encouraging to note that for 2019, PerkinElmer expects earnings per share within $4.02-$4.07, up from the previously guided range of $4.00-$4.05.

Deterrents

PerkinElmer expects foreign exchange headwinds of approximately $18 million in the second quarter of 2019 and $42 million in the full year. Additionally, on the tariff side, PerkinElmer confirmed that it expects to face a headwind of $1 million or less in the coming quarters from China.

PerkinElmer, Inc. Price and Consensus

 

PerkinElmer, Inc. Price and Consensus

PerkinElmer, Inc. price-consensus-chart | PerkinElmer, Inc. Quote

Which Way Are Estimates Treading?

For the second quarter, the Zacks Consensus Estimate for earnings stands at $1.01, calling for a year-over-year rise of 11%. The same for revenues is pegged at $730.3 million, suggesting a year-over-year increase of 3.8%.

For 2019, the Zacks Consensus Estimate for revenues is pegged at $2.92 billion, calling for rise of 5.1% year over year. For earnings, the same is pinned at $4.05, suggesting 12.2% growth year over year.

Key Picks

A few better-ranked stocks in the broader medical space are DENTSPLY SIRONA XRAY, Masimo Corporation MASI ad CONMED Corporation CNMD, each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

DENTSPLY’s long-term earnings growth rate is expected at 11.5%.

Masimo’s long-term earnings growth rate is projected at 16.1%.

CONMED’s long-term earnings growth rate is estimated at 13.3%.

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