PerkinElmer, Inc.

PerkinElmer, Inc. (NYSE: PKI) is a leading provider of products, services and solutions for the diagnostics, life sciences and applied markets.

Key Highlights:

• Stock closed below the rising trend-line: The stock of PKI has broken its short-term trend-line support and closed below the crucial support level of USD 188.25. The above indicates a bearish signal and might lead to further price correction. The stock already generated ~44% and ~55% return in the last six months and one year, respectively, and hence, we expect a profit booking in the coming days.

6-M Technical Price Chart (as on September 13, 2021). Source: REFINITIV, Analysis by Kalkine Group

• Stretched valuations: The stock is quoting at an EV to EBITDA multiple of 18.5x on an NTM basis, as compared to the industry (Healthcare Equipment & Supplies) median of 9.9x. Moreover, on the basis of price to cash flow multiple standpoint, the stock is trading at 24.9x on an NTM basis, considerably higher than the industry (Healthcare Equipment & Supplies) median of 15.7x.

• Liquidity profile below industry median: In Q2FY21, the company's current ratio stood lower at 2.01x, compared to the industry median of 3.16x. Moreover, the quick ratio also declined to 1.56x, which is below the industry median of 2.89x. The above illustrates a weak liquidity profile when compared against its peers.
  

Valuation Methodology (Illustrative): Price to Earnings

Stock Recommendation:

The company reported a constant increase in its total borrowing during the last five quarters, which remains a key concern for the company. Notably, at the end of H1FY21, total debt stood at USD 2,353.2 million, which is ~18% higher than FY20. Considering the aforesaid facts and valuation, we recommend a ‘Sell’ rating on the stock at the closing price of USD 182.86 on September 13, 2021.

*The reference data in this report has been partly sourced from REFINITIV.

Disclaimer

The advice given by Kalkine Canada Advisory Services Inc. and provided on this website is general information only and it does not take into account your investment objectives, financial situation and the particular needs of any particular person. You should therefore consider whether the advice is appropriate to your investment objectives, financial situation and needs before acting upon it. You should seek advice from a financial adviser, stockbroker or other professional (including taxation and legal advice) as necessary before acting on any advice. Not all investments are appropriate for all people. The website www.kalkine.ca is published by Kalkine Canada Advisory Services Inc. The link to our Terms & Conditions has been provided please go through them. On the date of publishing this report (mentioned on the website), employees and/or associates of Kalkine do not hold positions in any of the stocks covered on the website. These stocks can change any time and readers of the reports should not consider these stocks as advice or recommendations later.