Bruker (BRKR) Updates 2021 Outlook, Issues Medium-Term View

·4-min read

Bruker Corporation BRKR recently updated its 2021 financial guidance and provided medium-term financial outlook till 2024 at its 2021 Virtual Investor Day. Notably, the company discussed strategy and Project Accelerate 2.0 initiatives, including high-growth opportunities in the areas of proteomics and spatial biology.

The updated 2021 guidance and bullish medium-term financial outlook are indicative of Bruker’s strong long-term prospects.

Updated FY21 Guidance

For 2021, Bruker continues to expect organic revenue growth in the range of 13-15% year over year. Notably, on Jun 2, the company announced a significant raise in its organic revenue growth guidance from the earlier projection of 11%-13%.

For 2021, Bruker now expects revenue growth in the range of 16-18% year over year (up from the previously guided growth range of 14-16%). The Zacks Consensus Estimate for total revenues is pegged at $2.31 billion.

The company now expects adjusted earnings per share (EPS) in the band of $1.84 to $1.89, (up from previously guided range of $1.82-$1.87), indicating an uptick of 36-40% year over year. The Zacks Consensus Estimate for the metric is pegged at $1.87.

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The company projects foreign currency revenue tailwind of approximately 3% (unchanged from the previous guidance).

The company now expects non-GAAP operating margin expansion of 230 to 270 basis points (bps) year over year (up from previous guidance of 210 bps to 250 bps).

Medium-Term Outlook

At the Investor Day, Bruker also issued medium-term financial outlook through 2024.

For 2024, Bruker forecasts revenues in the range of $2.7-$3 billion, excluding acquisitions and currency effects. The company expects adjusted EPS in the band of $2.60 -$3.00. The company’s non-GAAP operating margin is expected in the band of 20.7-21.5%.

The long-term expected earnings growth rate for the stock is currently pegged at 19.1%.

Progress in Business

During its first-quarter 2021 earnings call, Bruker noted the robust acceptance of the company’s GHz-class systems. The company also witnessed strength in its microbiology and molecular diagnostics revenues. Launch of Bruker’s next generation, high-performance 80 MHz FT-NMR benchtop spectrometer in the United States and Canada is praiseworthy too. The growth in CALID Group revenues during the first quarter of 2021 reflected strong demand for life science mass spectrometry and FTIR/NIR/Raman molecular spectroscopy products. We are also encouraged to note that demand for the MALDI Biotyper is increasing in applied markets, specifically for food, feed and beverage.

Bruker has been making notable efforts to combat the coronavirus crisis. In Bremen, the company’s Germany campus, Bruker is currently offering a pilot COVID-19 at work testing program for its factory workforce. The program, implemented in April, offers weekly company-paid voluntary COVID-19 PCR tests to employees in the factory.

As announced on Jun 2, for the second quarter of 2021, the company projects 25% or greater year-over-year organic revenue growth.

Industry Prospects

Per a report by Fortune Business Insights, the global medical devices market size was $432.23 billion in 2020 and is expected to reach $657.98 billion by 2028, at a CAGR of 5.4%.

The market opportunities are considered to be favorable for Bruker’s long-term growth projection.

Price Performance

Shares of the company have gained 77.2% in a year’s time compared with the industry’s 68.7% rise.

Zacks Rank and Key Picks

Currently, the company carries a Zacks Rank #3 (Hold).

A few better-ranked stocks from the broader medical space are Envista Holdings Corporation NVST, Inogen, Inc INGN and IDEXX Laboratories, Inc. IDXX, each carrying a Zacks Rank #2 (Buy). You can see the complete list of Zacks #1 Rank (Strong Buy) stocks here.

Envista Holdings has an estimated long-term earnings growth rate of 26%.

Inogen has an estimated long-term earnings growth rate of 33%.

IDEXX Laboratories has a projected long-term earnings growth rate of 20%.

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