The Zacks Industry Outlook highlights Agilent Technologies, AMETEK, Fortive and Cognex

For immediate publication

Chicago, IL – April 13, 2022 – Today, Zacks Equity Research is covering Agilent Technologies A, AMETEK AME, Fortive FTV and Cognex CGNX.

Industry: Testing equipment

Link: https://www.zacks.com/commentary/1898003/4-testing-equipment-stocks-to-escape-a-challenging-industry

Global supply chain disruptions and end-market dynamics caused by the coronavirus pandemic have adversely impacted the Zacks Electronics – Testing Equipment industry. Depressed major sectors such as the automotive, industrial and linear markets have a major negative impact on the industry’s prospects.

However, Agile technologies, AMETEK, Fortress, AND Cognex are well-positioned to take advantage of 5G development opportunities, the strengthening of the drive towards automation and current trends in home learning and working from home. Moreover, the advent of software-based testing instruments and devices remains a comfort to industry participants.

Industry description

The Zacks Electronics – Test Equipment industry includes companies offering advanced instruments, electronic test equipment solutions, thermal management systems, electrical connectors, motors and various test solutions. The primary end markets served by this particular industry include consumer goods, automotive, industrial, aerospace and defense, healthcare, semiconductors and communications.

Industry players are constantly making technological advances to gain traction with semiconductor, vehicle, machinery, smartphone and medical device manufacturers who are constantly increasing their spending on electronic components.

3 trends shaping the future of electronics – the test equipment industry

Pandemic disruptions and headwinds: Industry players are reeling from the macroeconomic headwinds caused by the coronavirus (COVID-19). Supply chain challenges caused by the ongoing pandemic have severely impacted these companies. Moreover, production delays remain a serious problem. Moreover, the panoptic impact of the Covid-19 crisis has been wreaking havoc on new bookings for industry players for some time now.

5G prospects are key catalysts: The growing deployment of 5G holds near-term promises for industry players. Another important positive is the increase in demand for 5G test solutions that are required for 5G deployment. The current coronavirus-driven wave of work from home and home learning, which continues to drive demand for high-speed internet services across the globe, bodes well for electronics companies as they ramp up their 5G efforts.

Another factor supporting development is the growing number of high-speed data centers around the world. Given the optimistic scenario, the industry is expected to remain on its growth path, supported by determined efforts to consolidate the strength of 5G.

Solid adoption of traffic control and testing systems Positive: The growing use of precision motion control solutions and automated test systems in motion control devices and testing products, especially in the aerospace, automation, medical and military markets, is a boon. Moreover, commercial motor vehicles are likely to continue to drive demand for vehicle tracking systems, fleet management solutions and other private fleet applications that are part of the industry’s core offerings.

The Zacks Industry Rank indicates a bleak outlook

The Zacks Electronics – Test Equipment industry falls within the broader Zacks Computers and Technology sector. It has a Zacks Industry Rank of 173, which puts it in the bottom 32% of 250+ Zacks industries.

The group’s Zacks Industry Rank, which is essentially an average of the Zacks Rank of all member companies, indicates weak near-term prospects. Our research shows that the top 50% of Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1.

Before we present some stocks worth including in your portfolio, let’s take a look at the industry’s recent stock performance and its valuation picture.

The industry lags the S&P 500 and the sector

Over the past year, the Zacks Electronics – Testing Equipment Industry has underperformed the Zacks S&P 500 composite and the broader Zacks Computer and Technology sector.

Companies in the industry collectively lost 8.5% compared to the S&P 500’s gain of 8.6%. This compares with the computer and technology sector’s loss of 7.5%.

Current industry valuation

Based on the forward 12-month price-to-earnings (P/E) ratio, which is a commonly used multiplier for valuing Electronics – Testing Equipment stocks, the quotations of this industry are currently valued at 24.2X, which is higher than the S&P 500 index. 19 .51X, and in sector 22.59X.

Over the last five years, the industry has traded at prices ranging from 31.87X to 18.87X, with a median of 24.28X.

4 Test Gear Stocks to Keep Your Eyes on

Agile: The Palo Alto, California-based player is gaining solid momentum in both small and large molecule applications, strengthening its presence in the pharmaceutical market. Strength in the cellular analysis, liquid chromatography, and mass spectrometry spaces remains a tailwind.

Shares of this currently Zacks Rank #3 (Hold) company, an original equipment manufacturer with a broad portfolio of test and measurement products serving multiple end markets, experience synergies from the acquisition of BioTek Instruments. A’s solid execution of its multi-lab strategy, along with its consistent focus on aligning investments with more attractive growth paths and bringing innovative, high-margin products to market, remains a positive development. You can see see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Agilent shares have lost 1.3% over the past year. The Zacks Consensus Estimate for fiscal 2022 earnings has held steady at $4.86 per share over the past 30 days.

AMETEK: The Berwyn, Pennsylvania-based company is benefiting from the acquisitions of Magnetrol International and Crank Software, which are fueling the growth of its electronic instruments segment. Benefits from the Pacific Design Technologies buyout support the electromechanical segment. Moreover, the growing demand for precise motion control solutions remains a key driver of development.

The company, a manufacturer of electronic and electromechanical devices, remains optimistic about the strong development dynamics in the defense and medical markets. The successful execution of the company’s four core growth strategies currently at Zacks Rank #3, namely operational excellence, global market expansion, product development investments and acquisitions, is expected to continue to support its financials in the near future. perspective.

Over the past year, the company’s shares have lost 1.5%. AME’s Zacks Consensus Estimate for 2022 earnings has been holding steady at $5.40 per share over the past 30 days.

Fortress: The Everett, Washington-based company is benefiting from strong software demand trends and increased orders. Moreover, the main factor supporting development remains the solid development of Fortive Business System tools. Another positive is also the growing dynamics in the field of intelligent operational solutions, precision technologies and advanced healthcare solutions.

Currently a Zacks Rank #3, this provider of industrial technology and professional instrumentation solutions has been gaining on strategic acquisitions for some time now. FTV’s acquisition of ServiceChannel helps it penetrate the facility and asset lifecycle market. The Provation buyout is also expected to strengthen Fortive’s healthcare segment.

Over the past year, the company’s shares have lost 19.3%. The Zacks Consensus Estimate for Fortive’s 2022 earnings has been revised upward by 0.3% in the past 30 days to $3.09 per share.

Cognex: The Natick, Massachusetts-based entity is benefiting from increased demand for its products from large customers. Moreover, a major plus remains Cognex’s rising machine vision momentum thanks to ongoing trends in online learning and working from home, which in turn increases demand for tablets, laptops and wearables.

Currently a Zacks Rank #3 player, this machine vision developer and manufacturer remains well-positioned to capitalize on the factory automation space.

Cognex lost 14.8% last year. The Zacks Consensus Estimate estimates that fiscal 2022 earnings have been stable at $1.74 per share over the past 30 days.

Why didn’t you check out Zacks’ Top Stocks?

Our five top-performing strategies wiped out the S&P’s impressive +28.8% gain in 2021. Amazingly, they rose +40.3%, +48.2%, +67.6%, +94.4%, AND +95.3%. Today you can access their live picks at no cost or obligation.

See Free Stocks >>

Join us on Facebook: https://www.facebook.com/ZacksInvestmentResearch/ Zacks Investment Research is under common control with affiliates (including broker-dealers and investment advisors) that may engage in transactions in the above securities for customers of such affiliates.

Contact with the media

Zacks Investment Research

800-767-3771 ext. 9339

[email protected]

https://www.zacks.com

Past performance is no guarantee of future results. An inherent element of every investment is the possibility of loss. This material is for informational purposes only and nothing in it constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is given as to whether an investment is suitable for any particular investor. You should not assume that any investments in securities, companies, sectors or markets identified and described have been or will be profitable. All information is current as of the date hereof and is subject to change without notice. Any views and opinions expressed may not reflect the views of the company as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management of any securities. These returns are derived from hypothetical portfolios consisting of stocks with a Zacks Rank = 1 that have been rebalanced monthly with zero transaction costs. These are not profits from actual stock portfolios. The S&P 500 is an unmanaged index. Information regarding the results presented in this press release can be found at https://www.zacks.com/performance.

Want the latest recommendations from Zacks Investment Research? Today you can download the top 7 stocks for the next 30 days. Click to get this free report