RBC Capital reiterates Bio-Rad Labs stock rating on transformation outlook

RBC Capital has maintained its Outperform rating and $390.00 price target for Bio-Rad Laboratories Inc. (NYSE:BIO), following discussions with the company's management. The stock is currently trading at $381.32, which is close to its 52-week high of $396.23, and analysts believe it is undervalued with a Fair Value of $395.87. RBC Capital expects Bio-Rad's sales growth to recover in 2027 after product headwinds, while management works on improving the company's margin profile.

The financial services firm hosted meetings with Bio-Rad's CFO and investor relations team, providing a clearer picture of the company's multi-year transformation strategy. Portfolio management is seen as a key lever for growth, with cost rationalization supporting the margin opportunity. Bio-Rad has delivered a strong 43.6% return over the past six months, but the stock trades at a P/E ratio of 45.84, indicating that the market expects high growth.

During the meetings, management highlighted a pivot toward more proven, commercial M&A targets to complement the portfolio strategy, especially considering uneven end-market recovery. Despite positive results from Bio-Rad's second-quarter earnings and revenue, the stock fell in after-hours trading as investors weighed a cautious outlook and ongoing challenges in the life sciences sector, as well as pressure in China.

There were no significant mergers or acquisitions reported, and no upgrades or downgrades from analyst firms have been issued recently.