Report Interpretation

Overview

Goldman Sachs summarizes takeaways from meetings with Agilent investor relations in Paris. The firm remains constructive on the company’s medium-term growth outlook, anchored in instrument replacement demand, US pharma reshoring, AI-related automation opportunities and improving conditions in China.

Core views

Goldman Sachs says Agilent’s core message remains unchanged: the company should benefit in 2027 from LC and GC instrument replacement cycles as well as reshoring trends. The NDR reinforced the view that these demand drivers are progressing rather than being newly introduced. A central discussion point was exposure to AI-related laboratory buildouts in pharma. Goldman Sachs explains that AI models require multimodal, structured data, making automated laboratory workflows valuable because they can generate data more quickly and consistently than human intervention. Early AI investment focused on consortium datasets for public or semi-public use, but pharma companies are increasingly pursuing proprietary datasets to produce differentiated insights. The report views this as favorable for life-sciences tools because wet-lab capabilities are needed to create the underlying data. Agilent is described as particularly well positioned through its applied-setting automation expertise. Its “dark lab” experience involves 50-100 liquid or gas chromatographs operating around the clock without human intervention. Goldman Sachs believes this know-how could transfer to pharma applications over the next one to three years as pharma AI strategies become more defined. The report also points to Enterprise Service, representing 10% of service revenue and growing at a low-double-digit rate, as evidence that pharma customers already trust Agilent to help operate laboratories. China was a bright spot in 3Q26, with 9% growth compared with approximately flat growth in 1H26. Agilent therefore raised its full-year China guidance from flat to mid-single-digit growth, implying high-single-digit growth in 2H26. Management expressed confidence in a longer-term China growth range of mid- to high-single digits. Goldman Sachs attributes this confidence to Agilent’s end-market mix, local operating presence and broad product-and-service offering. About 80% of Agilent’s China business is exposed to pharma and applied markets, while diagnostics and Academic & Government contribute less. Goldman Sachs argues this mix gives the company exposure to biotech innovation, global pharma investment and PFAS testing, while reducing exposure to diagnostic pricing pressure that has affected some other large-cap tools companies. Direct sales and local manufacturing are seen as advantages over a distributor model because they improve visibility into customer demand and market trends. The firm also believes Agilent is relatively insulated from local competition because customers value its integrated hardware, consumables and services offering, while local competitors lack comparable scale. On reshoring, Agilent reiterated that it has begun booking pharma reshoring orders, including greenfield projects from five of the top 10 pharma companies. Management expects this trend to appear first in orders and then in revenue flowing through the income statement from 2027 to 2030. Goldman Sachs also notes that 75% of MFN deals signed with the US administration were with Agilent’s strategic customers, supporting its view that the company can capture a meaningful share of reshoring-related demand. Goldman Sachs reiterates its Buy rating on A with a 12-month price target of $185, based on a target 21x Q5-Q8 EV/EBITDA multiple. The price was $161.94 as of the 21 September 2026 close, implying 14.2% upside. The firm’s forecasts show revenue rising from $7,500.8 million in FY2026E to $8,496.4 million in FY2028E, EBITDA increasing from $2,184.4 million to $2,577.8 million, and EPS rising from $6.20 to $7.49 over the same period.

Analysis framework

The report combines management discussion from an investor NDR with Agilent’s recent earnings trends and operating exposure analysis. It assesses AI automation demand, China end-market mix and local execution, and the timing of reshoring orders and revenue conversion; valuation is based on a target EV/EBITDA multiple for Q5-Q8.

Methodology notes

• Valuation methodsEV/EBITDA valuation

  Target EV/EBITDA multiple valuation

  Goldman Sachs sets its $185 price target using a target 21x EV/EBITDA multiple for Q5-Q8, linking the target value to its forecast operating earnings.

• Industry AnalysisUpstream-Midstream-Downstream Transmission

  Pharma AI investment translating into laboratory automation and tools demand

  The report traces how pharma investment in proprietary AI datasets could require wet-lab data production, thereby supporting demand for Agilent’s automation, instruments and services.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• Agilent Technologies Inc. (A)

  Primary covered company; expected to benefit from LC/GC replacement cycles, pharma reshoring, lab automation demand and improving China growth.

  Strengths

  Applied automation expertise, integrated hardware-consumables-services offering, local China operations, and pharma customer relationships.

  Comparison

  Goldman Sachs views Agilent as relatively less exposed to diagnostic pricing pressure than some large-cap tools peers because of its China end-market mix.

  Risks

  Large-pharma spending weakness, China competition or geopolitical headwinds, macro pressure on Applied markets, and NA&D or siRNA/mRNA-related volatility.

Key data

• 12-month price target$185.00Goldman Sachs Buy-rated target price.
• Share price$161.94Price as of the 21 September 2026 close.
• Implied upside14.2%Upside to the stated 12-month price target.
• China growth in 3Q269%Compared with approximately flat China growth in 1H26.
• Full-year China guidanceMid-single-digit growthRaised from flat guidance; implies high-single-digit growth in 2H26.
• China business mix~80% Pharma and AppliedDiagnostics and Academic & Government have more limited contributions.
• Enterprise Service10% of service revenue; low-double-digit growthCited as evidence of pharma customers' operating trust.
• FY2026E revenue$7,500.8 millionGoldman Sachs forecast.
• FY2028E revenue$8,496.4 millionGoldman Sachs forecast.
• FY2026E EBITDA$2,184.4 millionGoldman Sachs forecast.
• FY2028E EBITDA$2,577.8 millionGoldman Sachs forecast.
• Target valuation21x Q5-Q8 EV/EBITDAValuation basis for the $185 price target.

Impact & implications

Goldman Sachs believes Agilent’s automation capabilities, China positioning and exposure to pharma reshoring create several paths for growth from 2027 onward. AI-related lab demand is viewed as an additional opportunity that could develop over the next one to three years as pharma customers establish proprietary-data strategies.

Risks

• Additional MFN deals may fail to materialize, weakening large-pharma spending and reducing capex, which could shorten the instrument replacement cycle.
• Local competition in China could displace Agilent, while geopolitical developments could create growth headwinds.
• Broader global macro weakness could pressure Goldman Sachs’ favorable view of a cyclical upturn in Agilent’s Applied end market.
• Weakness in NA&D and further siRNA/mRNA cancellations could cause outsized lumpiness in organic-growth assumptions.