I like when Wall Street underestimates companies. It sets those companies up to beat expectations. PerkinElmer (PKI) is one such company, observes Chuck Carlson, dividend reinvestment specialist and editor of DRIP Investor.
Wall Street is forecasting a significant decline in profits and revenues for this leading testing and diagnostics company in 2022, as demand for the company’s Covid-related services is expected to wind down significantly.
However, given the recent surge in Covid, as well as PerkinElmer’s penchant for beating Wall Street estimates, I think PerkinElmer stock will hold up just fine in 2022.
A big plus is the transformation of the firm’s business portfolio. The company has made some nine acquisitions over the last year or so, including the company’s largest deal in history, BioLegend, a leading provider of life sciences antibodies and reagents. PerkinElmer estimates the acquisitions have greatly expanded its total addressable market.
Fiscal 2023 should be an especially strong year, as PerkinElmer estimates that the assimilation of its many acquisitions and improved growth profile of its new markets will produce organic revenue growth in the high single digits.
I think the stock will outperform the market in 2022 and beyond and recommend purchases. Please note PerkinElmer offers a direct-purchase plan whereby any investor may buy the first share and every share directly from the company. Minimum initial investment is $250. The company’s transfer agent is Computershare (computershare.com).