IBD Stock Analysis
- Shares forming a flat base with a buy point currently at 34.09
- Stock broke downward trend, now above 50-day and 10-week
- Composite Rating stands at 95 out of best-possible score of 99
Industry Group Ranking
* Not real-time data. All data shown was captured at
1:08PM EDT on
The company recently reported a “solid start” to 2021, says Evercore ISI analyst Vijay Kumar. First-quarter sales grew by a double-digit percentage and adjusted earnings more than doubled. Meanwhile, Covid vaccines could offer further upside for Avantor, which provides chemicals and tools necessary for drug development.
“We had some robust feedback with Bulls pointing to sequential revenue acceleration (with one fewer selling day), a conservative guide and more than 10% (earnings per share) raise providing cause for cheer,” Kumar said in a note to clients.
In afternoon trading on the stock market today, Avantor stock popped 5% to close at 33.47.
Avantor Stock: Diversified Tools Provider
Avantor doesn’t just provide chemicals and tools for drugmakers. The Fortune 500 company also has customers in the health care, education, government, advanced technologies and materials industries.
Its biggest geographical segment is the Americas. But in the first quarter, the best growth came from its smallest region — Asia, Middle East and Africa. Sales in that geographical segment surged 27.2% organically to $100 million. On a strict as-reported basis, sales popped 32%.
Evercore’s Kumar reiterated his outperform rating on Avantor stock following the earnings report.
Avantor could enjoy a tailwind from booster and pediatric Covid vaccines. Further, the company is planning to finish its acquisition of GmbH, a consumables provider, in the third quarter. Also, Avantor recently said it would buy RIM Bio, a China-based maker of bioprocess bags and assembly tools.
Shares Break Short-Term Resistance
Following the latter acquisition announcement, CFRA Research analyst Sel Hardy initiated coverage of Avantor stock with a buy rating.
“We think Avantor shares offer an attractive entry point at current valuations as we see healthy growth thanks to a diverse product and services portfolio, a solid recurring revenue stream and long-term existing relationships with a global client base,” he said in a note.
On Thursday, Avantor stock broke through a downward-sloping trend line, and added some room above its 50-day moving average. It was also busting through short-term resistance around 32.50.
Also bullish, Avantor stock has a strong Composite Rating of 95 out of a best-possible 99, according to IBD Digital. That puts shares in the top 5% in terms of fundamental and technical growth measures.
Follow Allison Gatlin on Twitter at @IBD_AGatlin.
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