How Will Agilent Technologies (A) Stock Be Affected By Its CEO Transition?

NEW YORK (TheStreet) -- Agilent Technologies (A) shares are down 0.65% to $58.51 on heavy volume Thursday after the company announced that Mike McMullen, the senior vice president and president of the company's Chemical Analysis Group, will be succeeding current CEO William Sullivan on March 18, 2015.

Sullivan will transition into an advisory role until his scheduled retirement on October 31 of next year.

In the meantime, the bio analytical and electronic measurement solutions provider's board has appointed McMullen president and COO effective immediately.

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TheStreet Ratings team rates AGILENT TECHNOLOGIES INC as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:

"We rate AGILENT TECHNOLOGIES INC (A) a BUY. This is driven by a number of strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, reasonable valuation levels, increase in stock price during the past year and expanding profit margins. We feel these strengths outweigh the fact that the company has had sub par growth in net income."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • A's revenue growth trails the industry average of 21.7%. Since the same quarter one year prior, revenues slightly increased by 6.9%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • The current debt-to-equity ratio, 0.39, is low and is below the industry average, implying that there has been successful management of debt levels. To add to this, A has a quick ratio of 2.08, which demonstrates the ability of the company to cover short-term liquidity needs.
  • Compared to where it was a year ago today, the stock is now trading at a higher level, regardless of the company's weak earnings results. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
  • The gross profit margin for AGILENT TECHNOLOGIES INC is rather high; currently it is at 57.87%. A has managed to maintain the strong profit margin since the same quarter of last year. Despite the mixed results of the gross profit margin, A's net profit margin of 8.32% compares favorably to the industry average.
  • You can view the full analysis from the report here: A Ratings Report
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