WAT Should I Buy
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Waters Corp (WAT) is not a strong buy at the moment for a beginner investor with a long-term strategy. While the company has shown some positive financial growth and completed a significant acquisition, the recent weak Q4 results, cautious guidance, and mixed market sentiment make it prudent to hold off on investing until clearer signals of recovery or growth emerge.
The technical indicators suggest a bearish trend. The MACD histogram is negative and contracting, the RSI is neutral but leaning towards oversold levels, and the stock is trading near its key support level of 317.08. Moving averages are converging, indicating indecision in the market.
The company reported strong Q4 2025 sales growth of 7% YoY and completed the acquisition of BD's Biosciences and Diagnostic Solutions, which could provide long-term synergy opportunities. Analysts like Citi and Barclays have issued Buy and Overweight ratings, citing potential upside in earnings and a better biopharma market.
Weak Q4 results and a disappointing Q1 2026 outlook have caused significant stock price declines. Hedge funds are selling the stock, and there is no significant insider buying activity. The options market sentiment is bearish, and analysts have lowered price targets due to cautious guidance and concerns about the BD acquisition's short-term impact.
In Q4 2025, Waters Corp reported a revenue increase of 6.83% YoY to $932.36 million. However, net income dropped by 2.67% YoY to $225.21 million, and EPS declined by 2.58% YoY to $3.77. Gross margin improved slightly to 59.79%, up 1.82% YoY. While revenue growth is positive, declining profitability metrics raise concerns.
Analyst sentiment is mixed. While some firms like Citi and Barclays are optimistic about the company's growth potential and synergy opportunities, others like TD Cowen, UBS, and BofA have lowered price targets and expressed caution due to weak Q4 results and uncertainties surrounding the BD acquisition.
