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Agilent shares jump after upbeat UBS note

October 24, 2011

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NEW YORK—Shares of Agilent Technologies Inc. climbed after a UBS analyst started coverage of the scientific analysis and electronic measurement company with a "Buy" rating and said it has been "fundamentally transformed" since its acquisition of Varian Inc. last year.

THE SPARK: The analyst, Daniel Silver, called Agilent's stock "attractively priced" and set a target price of $43. He said he thinks the transformation of Agilent's product portfolio since buying Varian is "underappreciated" by Wall Street.

The company now has a 50-50 mix of life science and chemical analysis and measurement products, he said. The electronic unit was "entirely restructured," Silver added, with a third fewer employees and the sale of its least profitable businesses.

THE BACKGROUND: Agilent bought Australia-based Varian for $1.5 billion in May 2010 to broaden its reach in the life sciences, environmental and materials businesses.

THE ANALYSIS: Silver said he thinks Agilent's stock price already factors in a possible recession and a "draconian earnings decline" in fiscal 2012. He added he sees "less downside than expected."

A representative for Agilent did not immediately return an email for comment.

SHARE ACTION: Shares rose $2.22, or 6.3 percent, to $37.49 in afternoon trading Monday. The stock has traded in a 52-week range of $28.67 and $55.33. Year-to-date, it is down 9.5 percent.