8 Stocks on Jim Cramer’s Radar

3. Agilent Technologies, Inc. (NYSE:A)

Number of Hedge Fund Holders: 44

Discussing Agilent Technologies, Inc. (NYSE:A), Cramer said:

“Finally, how about Agilent Technologies, letter A, a company that provides instruments, software, and services for customers in the life sciences, diagnostics, and applied industrial end markets? This one’s down more than 14% from its 52-week high in May. Agilent’s in the news because the company hosted an analyst day yesterday and from what I hear, they told a pretty good story.”

At its recent analyst day, the company reaffirmed its long-term revenue growth forecast of 5-7%, exceeding market expectations, and slightly raised its operating margin expansion targets (50-100+ bps/yr), indicating potential growth fueled by revenue leverage and strategic initiatives such as Ignite.

The company’s Ignite plan focuses on driving growth through innovation, simplifying processes with a customer-first approach, and improving operational productivity. Furthermore, Cramer also highlighted the company’s recent reorganization. Acknowledging that the analyst day did not lead to much stock activity, Cramer said:

“Now, the analyst day didn’t have much impact on the stock, but I think it was a good reintroduction for this fine company which might have fallen off investors’ radar during this listless period for the life science space.

Again, there’s a good valuation argument for Agilent here. At its peak in September of 2021, the stock sold at 37 times forward earnings. Now it’s trading just under 22 times next year’s earnings estimates, very reasonable valuation. And I have more confidence in the numbers because we just got them from yesterday’s analyst meeting.”

In November, the company announced the new organizational structure to improve collaboration and better align with customer needs. The three business groups include Life Sciences and Diagnostics Markets Group (LDG), representing 38% of revenue, which focuses on pharma, biopharma, clinical, and diagnostics markets.

The Applied Markets Group (AMG), accounting for 20% of revenue, serves industries such as food, environmental, forensics, and chemicals. The Agilent CrossLab Group (ACG), making up 42% of revenue, supports all end markets by strengthening customer connections and providing services, software, and consumables.