What Happened?
A number of stocks jumped in the afternoon session after positive inflation data fueled hopes for an interest rate cut by the Federal Reserve. The latest Consumer Price Index (CPI) report showed inflation rose by a modest 0.2% in July and 2.7% over the last year. This cooler-than-expected data prompted a significant market rally, with the S&P 500, Dow, and Nasdaq all climbing as investors grew more optimistic. The prevailing view is that easing inflation gives the central bank room to lower interest rates. Lower rates typically reduce borrowing costs for businesses and make stocks more attractive relative to bonds, contributing to widespread gains across sectors like healthcare.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks.
Among others, the following stocks were impacted:
- Research Tools & Consumables company Bruker (NASDAQ:BRKR) jumped 3.7%. Is now the time to buy Bruker? Access our full analysis report here, it’s free.
- Generic Pharmaceuticals company Viatris (NASDAQ:VTRS) jumped 3.1%. Is now the time to buy Viatris? Access our full analysis report here, it’s free.
- Research Tools & Consumables company Sotera Health Company (NASDAQ:SHC) jumped 3.1%. Is now the time to buy Sotera Health Company? Access our full analysis report here, it’s free.
- Dental Equipment & Technology company Align Technology (NASDAQ:ALGN) jumped 3.3%. Is now the time to buy Align Technology? Access our full analysis report here, it’s free.
- Healthcare Technology for Providers company Omnicell (NASDAQ:OMCL) jumped 3.1%. Is now the time to buy Omnicell? Access our full analysis report here, it’s free.
Zooming In On Bruker (BRKR)
Bruker’s shares are very volatile and have had 20 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 8 days ago when the stock dropped 7.4% on the news that the company reported disappointing second-quarter results and lowered its full-year financial forecast, citing challenging market demand. The company’s revenue for the quarter landed at $797.4 million, which missed analyst expectations. A key metric, organic revenue, which measures sales growth from a company's core operations, fell by 7.0%. Earnings per share (EPS), a measure of profitability, came in at $0.32, significantly below the consensus estimate of $0.42. In response to the weak performance, Bruker cut its full-year guidance, and now projected an organic revenue decline between 2% and 4%. Management pointed to decreased demand for life-science research instruments, especially from U.S. academic and biopharma customers, as the primary cause. The company also announced a cost-saving plan intended to reduce annual expenses.
Bruker is down 45.9% since the beginning of the year, and at $31.80 per share, it is trading 55% below its 52-week high of $70.67 from September 2024. Investors who bought $1,000 worth of Bruker’s shares 5 years ago would now be looking at an investment worth $723.25.
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