Waters Corporation

This is our first report on major lab equipment manufacturer, Waters Corporation. The company had a decent 2022 and ended the year by generating an all-around beat in the fourth quarter and seeing growth across all end markets. This was driven by double-digit instrument growth. Waters’ growth has also been aided by its reinvigorated portfolio and this trend is expected to continue. In addition to enabling robust core instrument replacement, new products have led to growth prospects in large molecule applications, PFAS testing, and battery testing. Pharma saw a 6% increase in growth, driven by both large and small molecule applications. Its growth was led by Europe, which increased by low double digits. Besides that, demand for their most recent instrument introductions, the Xevo G3 and TQ Absolute, was extremely high and continued to gain excellent traction. The company’s e-commerce and service attachment growth activities assisted recurring revenues’ high single-digit rise. We initiate coverage on the stock of Waters Corporation with a ‘Hold’ rating.