Wolfe Research upgraded Waters Corp. (NYSE:WAT) to Outperform from Peerperform, assigning a $480 price target as it argued that shares were undervalued relative to the company’s growth and free cash flow potential.
The analyst said Waters was positioned to outperform due to a combination of above-average core growth, upside potential to its pro forma financial targets, strong free cash flow characteristics, and a highly regarded management team. Based on 2026 pro forma estimates, shares were trading at roughly 17.0x EV/EBITDA and 22.6x P/FCF, representing discounts of approximately 10% and 12% respectively to peers.
While Wolfe acknowledged that integrating BD Life Sciences could dilute Waters’ long-term organic growth profile and reduce the premium valuation once associated with the core business, the firm argued that management’s track record and the company’s diversified end-market exposure supported a higher valuation than where shares currently traded.
