Agilent's 2Q26 results beat expectations and full-year guidance was raised, with CAM and margin performance easing market concerns

Overview

This report is Goldman Sachs' commentary on AGILENT TECHNOLOGIES INC's 2Q26 results. The company's revenue, EPS, and core growth all exceeded expectations, and it raised full-year guidance related to revenue, EPS, and margins. The report believes that Chemicals and Advanced Materials, Pharma, the LC replacement cycle, the GC replacement cycle, semiconductor capex, and Ignite efficiency improvements together support a more constructive outlook.

Core views

The core view is that the two main investor concerns previously—whether margin ramp in 2026 could be delivered and whether the company's exposure to the chemicals end market would drag on growth—were partially de-risked this quarter. With CAM and margin performance exceeding expectations, market focus may shift to growth drivers such as the LC replacement cycle, share gains, benefits from reshoring, the GC replacement cycle, and CDMO capacity expansion next year.

Analysis framework

The report starts with a comparison of results versus consensus expectations and Goldman Sachs' expectations, breaks down revenue, core growth, EPS, margins, segment guidance, and end-market performance, and combines historical cycles, GS Tools Tracker, company guidance, and valuation multiples to assess the target price and investment rating.

Methodology notes

• valuation methodQ5-Q8 EV/EBITDA target multiple

  Derives the 12-month target price using a target valuation multiple of 19x Q5-Q8 EV/EBITDA.

  Goldman Sachs maintained its 19x Q5-Q8 EV/EBITDA target multiple and, after updating the peer set and rolling forward forecasts, raised the 12-month target price from $150 to $155.

• factor analysisGS Factor Profile

  Compares stocks across four dimensions: growth, financial returns, valuation multiples, and composite factors.

  Goldman Sachs Factor Profile uses standardized rankings and percentiles to compare the company with covered stocks and industry peers, providing investment context.

• M&A scenarioM&A Rank

  Assesses the probability of a company becoming an acquisition target using qualitative and quantitative factors.

  Goldman Sachs' M&A Rank categorizes potential acquisition probability from 1 to 3; if ranked 1 or 2, M&A factors are typically incorporated into the target price.

• data toolQuantum

  Goldman Sachs' proprietary financial database used for company financial history, forecasts, and ratio analysis.

  Quantum can be used for deep single-company analysis as well as cross-industry and cross-market company comparisons.

Asset mapping & comparison

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

• AGILENT TECHNOLOGIES INC (A.US)

  research target; Goldman Sachs maintained a Buy rating and raised the 12-month target price.

  Strengths

  2Q26 revenue, EPS, and core growth all exceeded expectations; FY26 revenue, EPS, and margin guidance was raised; CAM, Pharma, and margin performance were strong.

  Weaknesses

  Growth remains affected by end-market cycles, geographic mix, cost pressures, and batch timing in certain businesses.

  Comparison

  2Q26 performance was better than the FactSet consensus estimate and Goldman Sachs' estimate; strong chemicals performance within CAM represented some upside surprise relative to negative readings from peers.

  Risks

  Weak spending from large Pharma, local competition and geopolitics in China, global macro weakness, and growth volatility from NASD and siRNA/mRNA cancellations.

• Chemicals and Advanced Materials (CAM)

  one of the key growth drivers for A.US.

  Strengths

  Core revenue grew 8%, driven by semiconductor demand, chemicals capex, the GC replacement cycle, and investment in the Americas.

  Weaknesses

  The business is cyclical and highly correlated with growth in industrial end markets.

  Comparison

  The report believes strong semiconductors were largely in line with expectations, but strong chemicals was more of an upside surprise versus peer readings this quarter.

  Risks

  If the industrial cycle weakens or chemicals capex slows, CAM's spillover contribution may diminish.

Key data

• 2Q26 revenue$1.835 billionAbove the FactSet consensus estimate of $1.799 billion and Goldman Sachs' estimate of $1.807 billion.
• 2Q26 non-GAAP EPS$1.49Above the consensus estimate and Goldman Sachs' estimate of $1.41.
• 2Q26 core revenue growth6.3%Above the consensus estimate of 4.8% and Goldman Sachs' estimate of 4.5%.
• FY26 core revenue growth guidance4.5% to 6.0%The company raised the midpoint of guidance by about 30 basis points.
• FY26 EPS guidance$6.00 to $6.10Previously $5.90 to $6.04, with the midpoint raised by about $0.08.
• FY26 reported revenue guidance$7.39 billion to $7.49 billionPreviously $7.3 billion to $7.5 billion; the midpoint was raised by about $40 million and includes a 1.8% FX tailwind.
• 3Q26 revenue guidance$1.83 billion to $1.85 billionEquivalent to 4.4% to 5.9% core revenue growth and includes a 0.6% FX tailwind.
• 3Q26 EPS guidance$1.48 to $1.50Roughly in line with Goldman Sachs' prior $1.47 and the consensus estimate of $1.50.
• CAM core revenue growth8%Driven by semiconductor demand, chemicals capex, and strong performance in the Americas.
• Pharma core revenue growth6%One of the company's largest end markets continued to grow.
• 2Q26 operating margin26.4%Expanded 130 basis points year over year and 180 basis points sequentially, driven by pricing, operating leverage, procurement efficiency, geographic mix, and Ignite initiatives.
• Operating cash flow guidance$1.6 billion to $1.7 billionManagement maintained full-year operating cash flow guidance.

Impact & implications

The report's implication for A.US is positive: through better-than-expected results and raised guidance, the company reduced market concerns about margin delivery and weakness in the chemicals end market. If the LC and GC replacement cycles, semiconductor capex, reshoring, and CDMO capacity expansion continue to materialize, earnings and valuation could receive further support; however, local competition in China, macro weakness, softer Pharma capex, and NASD-related volatility could still weigh on growth.

Risks

• If incremental spending by large Pharma remains weak, it could reduce capex and shorten instrument replacement cycles.
• Local competition in the China market could displace Agilent, or geopolitical factors could pressure growth.
• Further global macro deterioration could weaken the report's positive view on an upcycle in Applied end markets.
• Weakness in NASD and further cancellations of siRNA/mRNA projects could cause greater volatility in organic growth assumptions.
• Middle East conflict and memory chip demand could push up costs, although management believes the Ignite Operating System can offset some inflation impact.

What to watch

• Whether the LC replacement cycle continues to advance and drives share gains.
• Whether the GC replacement cycle develops from an early-stage trend into a more durable chemicals capex driver.
• Whether strong chemicals and semiconductor demand within CAM can continue.
• Whether operating margin in 2H FY26 continues to improve as guided, especially flat in 3Q and sequential expansion in 4Q.
• Whether Specialty CDMO batch timing in the second half can support the full-year target of mid-teens growth.
• The impact of China competition, the global macro environment, and changes in large Pharma capex on growth expectations.