HSBC has begun coverage on Waters Corp. (NYSE: WAT) with a Buy recommendation and a price objective set at $460.00. That target equates to almost an 18% upside versus the stock's prevailing price of $390.90, which HSBC notes is trading near InvestingPro’s calculated Fair Value, implying the current market price is broadly in line with that assessment.
In its initiation, HSBC frames Waters as a "growth at a reasonable price" opportunity and forecasts mid-teens earnings growth for the company. The bank highlights three principal sources of growth that underpin its view:
- an equipment replacement cycle;
- revenue and cost synergies expected from Waters’ pending acquisition of Becton Dickinson’s Biosciences and Diagnostic Solutions business; and
- volume leverage that could support margin expansion.
Market metrics shown by InvestingPro place Waters at a price-to-earnings ratio of 36.2 and a price/earnings-to-growth (PEG) ratio of 9.4. Those figures indicate investors are currently assigning a premium to Waters for its growth prospects.
Waters is in the midst of a transformational deal: a $17.5 billion acquisition of BD’s Biosciences and Diagnostic Solutions business. That transaction is expected to close around the end of the first quarter of 2026 and, upon completion, HSBC says it would create a more diversified global leader in life sciences and diagnostics.
InvestingPro data cited by HSBC shows Waters operates with a moderate level of debt and generates robust cash flows that should be adequate to cover interest obligations. HSBC also suggests potential future catalysts for a positive rerating of the stock, including the prospect of lower interest rates and continued deleveraging after the transaction is finalized. The bank further highlights Waters’ strong margin profile and a rising proportion of recurring revenues from precision chemistry consumables and services as pillars of financial stability.
Other recent analyst activity reflects a range of views. Bank of America Securities noted Waters’ third-quarter results were "broadly ahead of expectations," pointing to steady instrument demand and stronger-than-expected chemistry and recurring revenue. TD Cowen raised its price target on Waters to $400 while retaining a Hold rating following conversations with company executives. BofA increased its price target to $375 and kept a Neutral stance.
Several firms adopted more positive stances: Wolfe Research upgraded Waters to Outperform, citing above-average core growth potential and an attractive free cash flow profile. William Blair also started coverage with an Outperform rating, emphasizing expected synergies from the BD portfolio acquisition. Meanwhile, Morgan Stanley initiated coverage with an Equalweight rating, describing Waters as a well-operated company with solid financial performance. Together, these analyst actions present a spectrum of perspectives on Waters’ strategic and financial positioning.
Contextual summary: HSBC’s Buy initiation and $460 target rest on projected mid‑teens earnings growth, deal-related synergies, an equipment replacement cycle and recurring revenue strength. Waters faces analyst consensus that is mixed, with several firms issuing upgrades or higher targets while others maintain more cautious stances.