Fullerton-based Beckman Coulter Inc.’s stock rose Thursday after an analyst upgraded it because of recurring revenue and its $800 million deal for Olympus Corp.’s diagnostic business.
Shares of Beckman, which makes instruments, test kits and supplies used in hospitals, clinical laboratories and research institutions, were up about 3% with a market value of $3 billion at close of trading.
Analyst C. Anthony Butler of Barclays Capital upgraded Beckman to “overweight” from “equal weight” in a report.
Butler said he upgraded Beckman because of its steady recurring revenue stream, including supply sales, test kit sales and service and lease payments.
Butler also said that he believes the Olympus deal, which was announced in late February and is set to close in the third quarter, will bring in new revenue and sustain Beckman’s growth.
Beckman said $2.4 billion, or 77% of its $3.1 billion in 2008 revenue, came from recurring sources. It’s said it expects its recurring revenue to grow another 6% to 7% this year, excluding foreign exchange.
‘The company’s recurring-revenue model provides it both stability and visibility both rare in this environment,” Butler said.
As for the Olympus deal, Butler said it will make Beckman stronger outside the U.S. and improve its market share in immunoassay tests, which are routinely used to detect substances in urine or blood.
Beckman officials have said they bought Olympus’ diagnostic business to pick up share in Europe, the backyard of key rivals Roche Diagnostics Corp., part of Switzerland’s Roche Holdings Ltd., and Germany’s Siemens AG.
