UPDATE: Bank of America Upgrades Bruker on Margin Potential

In a report published Friday, Bank of America analyst Derik de Bruin upgraded Bruker (NASDAQ: BRKR) from Neutral to Buy, and raised the price target from $20.00 to $26.00.

In the report, Bank of America noted, “We have been positive on BRKR's technology, as most years BRKR has organically grown the top-line faster than many of its analytical instrument peers. But, despite this higher growth, execution has been poor and both margins and profitability have significantly lagged peers. However, BRKR's restructuring initiatives and management changes over the last year highlight a renewed focus on not just growing, but improving profitability, and benefits from these actions are slowly beginning to materialize. While still expensive on a P/E basis, as the company is under-earning, BRKR is at a ~40% discount to peers on an EV/Sales basis. While BRKR still has a lot of work to do to reduce quarterly variability, overall, we believe that investors will reward BRKR for progress on core margin expansion and shrink the valuation gap. As such, we upgrade BRKR to Buy and raise our PO to $26.”

Bruker closed on Thursday at $19.45.