We recently compiled a list of the 8 Best Scientific Instruments Stocks to Buy. In this article, we are going to take a look at where Mettler-Toledo International Inc. (NYSE:MTD) stands against the other scientific instruments stocks.
A scientific instrument is a device or tool used for scientific purposes, including the study of natural phenomena and theoretical research. These instruments are designed to facilitate theoretical research and are utilized to measure, analyze, and verify the properties of materials and elements. Scientists have worked in laboratories equipped with an ever-evolving array of scientific instruments for hundreds of years. In the 1990s, benchtop automation devices spurred a surge in productivity and discoveries, further enhanced by computerized networking in the 2000s and 2010s. Today, most pharmaceutical companies’ R&D labs remain at this advanced stage, featuring sophisticated centrifuges and stations that have been instrumental in making significant health advancements.
The global scientific instrument market reached $44.1 billion in 2023 and is projected to grow to $67.5 billion by 2032, with a compound annual growth rate (CAGR) of 4.7% during the period from 2024 to 2032. The primary driver of demand in the global scientific instrument market is the growth of the research and development sector. Additionally, increased collaboration between governments and manufacturers to equip government and university laboratories, as well as other research institutions, with the best instruments is expected to contribute to market growth. Furthermore, the integration of scientific instruments with computers enhances their functions, allows for parameter adjustments, and streamlines data sampling, collection, resolution, and analysis, thus further expanding the global demand for scientific instruments.
In addition, the scientific instruments market has been segmented into various categories. According to a report by Allied Market Research, the clinical analyzers segment is projected to generate the highest revenue from 2021 to 2030. This growth is driven by the increasing adoption of point-of-care testing devices and laboratory automation, as well as the rise in chronic conditions requiring clinical analyzers for diagnosis. Additionally, the research segment is anticipated to experience the fastest compound annual growth rate. This is due to the rising demand for scientific instruments in the research of chronic conditions such as cardiovascular diseases, cancer, and neurological diseases, along with the development of advanced instruments for research purposes.
Science heavily relies on technology, and without sophisticated instruments designed to meet the demands of experiments and test new or existing theories and models, scientific progress would stall. A prime example is the life sciences industry, which has produced groundbreaking innovations such as COVID-19 vaccines, cancer immunotherapies, glucose monitors, and pacemakers. Another emerging trend is the use of AI in laboratories. According to a report, the global life science analytics market size is projected to grow from $15.27 billion in 2023 to $43.86 billion by 2032, at a compound annual growth rate (CAGR) of 11.8%. Another growing trend comes in the form of Generative AI (gen AI), which is set to revolutionize nearly every aspect of the life sciences, and in turn, the scientific instruments sector. According to McKinsey, gen AI could create $60 billion to $110 billion in annual economic value for pharmaceutical and medtech companies, with $18 billion to $30 billion of that value coming from commercial functions alone.
With these details in mind, we will now take a look at the best scientific instruments stocks to buy.
Our Methodology
To compile the list of the best scientific instruments stocks to invest in, we focused on companies listed on the New York Stock Exchange and Nasdaq that are involved in the scientific instruments industry. The stocks were ranked according to Insider Monkey’s database, which tracks 919 hedge funds as of the end of Q1 2024. The ranking is based on the ascending order of the number of hedge fund investors in each stock. Why are we interested in the stocks that hedge funds pile into? The reason is simple, our research has shown that we can outperform the market by imitating the top stock picks of best hedge funds. Our quarterly newsletter’s strategy picks 14 small and large-caps every quarter and it has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
A close-up of a laboratory instrument, with a technician making precise adjustments.
Mettler-Toledo International Inc. (NYSE:MTD)
Number of Hedge Fund Holders: 42
Mettler-Toledo International Inc. (NYSE:MTD) is a global manufacturer and marketer of precision instruments for use in laboratory, industrial, and food retailing applications. The company reported a modest rise in adjusted earnings per share (EPS) for the first quarter of 2024, with the instrument supplier announcing an adjusted EPS of $8.89, marking a 2% increase from $8.69 in the same quarter last year and surpassing analyst estimates of $7.65. Revenue for the quarter remained steady at $925.9 million, outperforming the consensus estimate of $879.72 million.
Looking forward, Mettler-Toledo International Inc. (NYSE:MTD) projects a 4% decline in local currency sales for the second quarter of 2024, with adjusted EPS expected to range between $8.90 and $9.05, reflecting an 11% to 13% decrease. This guidance accounts for an estimated 2% negative impact from adverse currency conditions. For the full year, the company anticipates a 2% increase in local currency sales and an adjusted EPS between $39.90 and $40.40, indicating a growth of 5% to 6%.
Following these results, Stifel raised its price target for MTD shares to $1,510.00 from $1,270.00, while maintaining a Buy rating. Stifel anticipates that Mettler-Toledo International Inc. (NYSE:MTD)’s capacity for mid-single-digit organic growth next year could facilitate an EPS increase of 15% or more. This projection suggests a promising growth trajectory for the company’s stock as the year progresses.
As of the end of the first quarter of 2024, Insider Monkey’s tracking data showed that 42 out of 919 hedge funds held stakes in Mettler-Toledo International Inc. (NYSE:MTD). The largest stakeholder among them was Terry Smith’s Fundsmith LLP, with a $812.2 million investment.
Overall MTD ranks 4th on our list of the best scientific instruments stocks to buy. You can visit 8 Best Scientific Instruments Stocks to Buy to see the other scientific instruments stocks that are on hedge funds’ radar. While we acknowledge the potential of MTD as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than MTD but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.
