> **来源：[研报客](https://pc.yanbaoke.cn)** # 2026 LIFE SCIENCE TOOLS OUTLOOK 1.0 January 4, 2026 # The Wolfe Byte We are upgrading our outlook for Tools to Market Overweight (MO). The environment is normalizing and expectations have an upward bias. The near-term outlook is most attractive for BRKR, ILMN and SRT-3; we will revisit after pending updates. See our 65-page deck for details. Process: Over the past month we spoke with every company in our Tools coverage universe, pressure tested our models, and conducted an extensive investor survey. Observation: Financial expectations seem to have the most-notable upward bias we have seen in $\sim 5$ years with potential drivers to upward revisions including post-MFN agreement settlements, reshoring order announcements, more stable academic funding/announcements, GLP-1 volumes, PFAS testing, and China stability. Upward revisions will be key given the group now trades at a $>10\%$ relative premium to the S&P; we still see room for expansion, but stock outperformance is increasingly dependent on upward revisions. Action/Recommendations: We are officially upgrading the group outlook. We believe BRKR, ILMN, and SRT-3 are best positioned in the near term; these are our current top picks, but we will revisit subsequent to updates that we expect over the next 2 weeks. We remain at Outperform on DHR, RGEN, STVN, TMO, TWST, and WAT. Also, while we are not recommending purchase of AVTR, we would be cautious being negatively positioned in the near-term. Biggest Controversy: We note that the biggest area of debate in our coverage universe is on oral vs. injectable GLP-1 share and the impact on the pharma delivery/services companies (STVN, WST). While we believe this is adequately captured in expectations, we believe this overhang is enough to warrant us remaining at Market Weight for this sector. # Key Links To Our Reports/Resources 2026 Investor Outlook Survey (link) - JP Morgan Healthcare expectations (link) - Fundamental assessment of normalized growth (link) - Request for our question bank (link) <table><tr><td>COMPANY</td><td>TICKER</td><td>RATING</td><td>PT (PRIOR)</td><td>% UPSIDE</td></tr><tr><td>Agilent Technologies, Inc.</td><td>A</td><td>PP</td><td>NA</td><td></td></tr><tr><td>Avantor, Inc.</td><td>AVTR</td><td>PP</td><td>NA</td><td></td></tr><tr><td>Bruker Corporation</td><td>BRKR</td><td>OP</td><td>$60</td><td>24.7%</td></tr><tr><td>Danaher Corporation</td><td>DHR</td><td>OP</td><td>$260</td><td>12.8%</td></tr><tr><td>Hologic, Inc.</td><td>HOLX</td><td>PP</td><td>NA</td><td></td></tr><tr><td>Illumina, Inc.</td><td>ILMN</td><td>OP</td><td>$150 ($125)</td><td>11.6%</td></tr></table> Source: Wolfe Research OP=Outperform, PP=Peer Perform, UP=Underperform, NR=Not Rated Doug Schenkel dschenkel@wolfereresearch.com (617) 458-7820 View Doug's Research View Comp Table Madeline Mollman mmollman@wolfereresearch.com (617) 458-7818 Austin Kennedy akennedy@wolfereresearch.com 617-458-7817 Colleen Babington, PhD cbabington@wolfereresearch.com This report is limited solely for Wolfe Research's clients. Please see analyst certifications and important disclosures beginning on page 68. # COMPANY Priced as of 01/02/26 # TICKER # RATING # PT (PRIOR) # % UPSIDE <table><tr><td>COMPANY</td><td>TICKER</td><td>RATING</td><td>PT (PRIOR)</td><td>% UPSIDE</td></tr><tr><td>Maravai Lifesciences Holdings, Inc. Class A</td><td>MRVI</td><td>PP</td><td>NA</td><td></td></tr><tr><td>Mettler-Toledo International Inc.</td><td>MTD</td><td>PP</td><td>NA</td><td></td></tr><tr><td>Pacific Biosciences of California, Inc.</td><td>PACB</td><td>PP</td><td>NA</td><td></td></tr><tr><td>Qiagen</td><td>QGEN</td><td>PP</td><td>NA</td><td></td></tr><tr><td>Repligen Corporation</td><td>RGEN</td><td>OP</td><td>$195</td><td>18.6%</td></tr><tr><td>Revvity, Inc.</td><td>RVTY</td><td>PP</td><td>NA</td><td></td></tr><tr><td>Sartorius AG Pref</td><td>SRT3-DE</td><td>OP</td><td>€265 (€250)</td><td>6.9%</td></tr><tr><td>Stevanato Group SpA</td><td>STVN</td><td>OP</td><td>$28</td><td>36.1%</td></tr><tr><td>Thermo Fisher Scientific Inc.</td><td>TMO</td><td>OP</td><td>$625 ($615)</td><td>5.5%</td></tr><tr><td>Twist Bioscience Corp.</td><td>TWST</td><td>OP</td><td>$40 ($35)</td><td>23.5%</td></tr><tr><td>10x Genomics Inc Class A</td><td>TXG</td><td>PP</td><td>NA</td><td></td></tr><tr><td>Waters Corp.</td><td>WAT</td><td>OP</td><td>$480</td><td>25.7%</td></tr><tr><td>West Pharmaceutical Services, Inc.</td><td>WST</td><td>PP</td><td>NA</td><td></td></tr></table> Source: Wolfe Research OP=Outperform, PP=Peer Perform, UP=Underperform, NR=Not Rated Priced as of 01/02/26 # Investment Conclusion We remain constructive on the long-term structural drivers to GDP+ growth for the group and feel incrementally more confident that there are reasons for optimism with regard to headwinds we have seen over the past few years...at least as we start to look for "what is real" after we move past current policy dynamics. We expect (1) a return to revenue growth; (avg: LSD/MSD), (2) robust margin expansion (avg: 50bp+), and (3) some multiple expansion, and most importantly 4) upwards revisions of estimates (as opposed to the series of cuts over the last few years. We believe BRKR, ILMN, and SRT-3 are best positioned in the near term; these are our current top picks, but we will revisit subsequent to updates that we expect over the next 2 weeks. # Life Science Tools Quarterly # January 2026 Doug Schenkel Life Science & Diagnostics Tools dschenkel@wolfereresearch.com (617) 458-7820 Click Here for Doug's Research Click Here for Life Science Tools & Diagnostics Comp Sheet Madeline Mollman mmollman@wolfereresearch.com (617) 458-7818 Austin Kennedy akennedy@wolferresearch.com (617)458-7817 Colleen Babington, PhD cbabington@wolfereresearch.com (617)458-7819 # Table of Contents # Executive Summary - Comp Sheet Key Catalysts - Company Snapshots # Estimate Changes # Stock Performance & Relative Valuation # Company Snapshots Large Cap Tools Bioprocessing Specialty Tools - Drug Packaging & Delivery Note: All pricing and coverage data as of 12/31/25 unless otherwise noted. # Executive Summary Coverage Universe Trading Comps <table><tr><td rowspan="2">Company</td><td rowspan="2">Ticker</td><td rowspan="2">Rating</td><td rowspan="2">Price</td><td rowspan="2">Price Target</td><td rowspan="2">% Upside (Downside)</td><td rowspan="2">Market Cap</td><td rowspan="2">Enterprise Value</td><td colspan="2">EV / Sales</td><td colspan="2">EV / EBITDA</td><td colspan="2">P / E</td><td colspan="2">Debt / LTM EBITDA</td></tr><tr><td>2026E</td><td>2027E</td><td>2026E</td><td>2027E</td><td>2026E</td><td>2027E</td><td>Gross</td><td>Net</td></tr><tr><td>Large Cap Tools (Mollman & Kennedy)</td><td colspan="15">Market Weight</td></tr><tr><td colspan="16">Diversified</td></tr><tr><td>Agilent</td><td>A</td><td>Peer Perform</td><td>$138</td><td>NA</td><td>-</td><td>$39,109</td><td>$40,674</td><td>5.6x</td><td>5.2x</td><td>19.1x</td><td>17.4x</td><td>23.2x</td><td>20.9x</td><td>1.7x</td><td>0.8x</td></tr><tr><td>Avantor</td><td>AVTR</td><td>Peer Perform</td><td>$11</td><td>NA</td><td>-</td><td>$7,814</td><td>$11,420</td><td>1.8x</td><td>1.7x</td><td>11.1x</td><td>10.5x</td><td>13.0x</td><td>12.1x</td><td>3.4x</td><td>3.2x</td></tr><tr><td>Bruker</td><td>BRKR</td><td>Outperform</td><td>$48</td><td>$60</td><td>-</td><td>$7,310</td><td>$9,001</td><td>2.5x</td><td>2.4x</td><td>14.7x</td><td>13.2x</td><td>22.3x</td><td>19.4x</td><td>3.6x</td><td>3.1x</td></tr><tr><td>Danaher</td><td>DHR</td><td>Outperform</td><td>$230</td><td>$260</td><td>13%</td><td>$162,743</td><td>$178,071</td><td>7.0x</td><td>6.6x</td><td>21.7x</td><td>19.9x</td><td>27.6x</td><td>25.3x</td><td>2.2x</td><td>2.0x</td></tr><tr><td>Illumina</td><td>ILMN</td><td>Outperform</td><td>$134</td><td>$150</td><td>12%</td><td>$20,529</td><td>$21,468</td><td>4.9x</td><td>4.7x</td><td>16.8x</td><td>14.7x</td><td>26.4x</td><td>22.4x</td><td>1.7x</td><td>0.8x</td></tr><tr><td>Mettler Toledo</td><td>MTD</td><td>Peer Perform</td><td>$1,411</td><td>NA</td><td>-</td><td>$28,833</td><td>$30,973</td><td>7.4x</td><td>7.1x</td><td>23.8x</td><td>22.2x</td><td>30.9x</td><td>27.8x</td><td>1.8x</td><td>1.7x</td></tr><tr><td>Sartorius</td><td>SRT3-DE</td><td>Outperform</td><td>€ 248</td><td>€ 265</td><td>7%</td><td>€ 16,556</td><td>€ 20,231</td><td>5.4x</td><td>5.0x</td><td>17.8x</td><td>15.7x</td><td>NM</td><td>NM</td><td>3.9x</td><td>3.6x</td></tr><tr><td>Thermo Fisher Scientific</td><td>TMO</td><td>Outperform</td><td>$593</td><td>$625</td><td>5%</td><td>$222,611</td><td>$256,308</td><td>5.5x</td><td>5.3x</td><td>21.3x</td><td>19.8x</td><td>24.2x</td><td>21.7x</td><td>3.2x</td><td>3.1x</td></tr><tr><td>Waters</td><td>WAT</td><td>Outperform</td><td>$382</td><td>$480</td><td>-</td><td>$37,699</td><td>$41,164</td><td>6.8x</td><td>5.7x</td><td>19.3x</td><td>15.9x</td><td>25.8x</td><td>22.6x</td><td>1.2x</td><td>0.8x</td></tr><tr><td colspan="16">Diagnostic-Heavy</td></tr><tr><td>Hologic</td><td>HOLX</td><td>Peer Perform</td><td>$75</td><td>NA</td><td>-</td><td>$16,632</td><td>$16,937</td><td>4.0x</td><td>3.8x</td><td>12.2x</td><td>11.4x</td><td>16.4x</td><td>15.0x</td><td>1.9x</td><td>0.2x</td></tr><tr><td>Qiagen</td><td>QGEN</td><td>Peer Perform</td><td>$45</td><td>NA</td><td>-</td><td>$9,799</td><td>$10,236</td><td>4.7x</td><td>4.4x</td><td>13.1x</td><td>12.3x</td><td>17.8x</td><td>16.2x</td><td>2.8x</td><td>0.6x</td></tr><tr><td>Revity</td><td>RVTY</td><td>Peer Perform</td><td>$98</td><td>NA</td><td>-</td><td>$11,128</td><td>$13,411</td><td>4.6x</td><td>4.4x</td><td>15.1x</td><td>14.2x</td><td>18.6x</td><td>17.1x</td><td>3.9x</td><td>2.7x</td></tr><tr><td>SMID Cap / Specialty Tools (Mollman)</td><td colspan="15">Market Weight</td></tr><tr><td colspan="16">Bioprocessing-Heavy</td></tr><tr><td>Maravai Lifesciences</td><td>MRVI</td><td>Peer Perform</td><td>$3</td><td>NA</td><td>-</td><td>$869</td><td>$1,034</td><td>5.0x</td><td>4.9x</td><td>NM</td><td>25.3x</td><td>NM</td><td>NM</td><td>(9.0x)</td><td>(5.0x)</td></tr><tr><td>Repligen</td><td>RGEN</td><td>Outperform</td><td>$164</td><td>$195</td><td>19%</td><td>$9,251</td><td>$9,028</td><td>10.8x</td><td>9.4x</td><td>52.7x</td><td>55.0x</td><td>75.6x</td><td>62.0x</td><td>3.9x</td><td>(1.6x)</td></tr><tr><td colspan="16">Sequencing & Omics</td></tr><tr><td>10x Genomics</td><td>TXG</td><td>Peer Perform</td><td>$17</td><td>NA</td><td>-</td><td>$2,103</td><td>$1,615</td><td>2.6x</td><td>2.4x</td><td>NM</td><td>NM</td><td>NM</td><td>NM</td><td>0.7x</td><td>6.5x</td></tr><tr><td>Pacific Biosciences</td><td>PACB</td><td>Peer Perform</td><td>$2</td><td>NA</td><td>-</td><td>$556</td><td>$904</td><td>5.0x</td><td>4.5x</td><td>NM</td><td>NM</td><td>NM</td><td>NM</td><td>(2.4x)</td><td>(1.3x)</td></tr><tr><td>Twist Bioscience</td><td>TWST</td><td>Outperform</td><td>$32</td><td>$40</td><td>23%</td><td>$1,981</td><td>$1,798</td><td>4.2x</td><td>3.7x</td><td>NM</td><td>NM</td><td>NM</td><td>NM</td><td>0.0x</td><td>16.2x</td></tr><tr><td>Pharma Services & Outsourcing (Kennedy)</td><td colspan="15">Market Weight</td></tr><tr><td>Stevanato</td><td>STVN</td><td>Outperform</td><td>$21</td><td>$28</td><td>36%</td><td>$5,616</td><td>$6,012</td><td>4.0x</td><td>3.7x</td><td>14.8x</td><td>12.7x</td><td>27.5x</td><td>22.0x</td><td>1.5x</td><td>1.1x</td></tr><tr><td>West Pharmaceutical Services</td><td>WST</td><td>Peer Perform</td><td>$276</td><td>NA</td><td>-</td><td>$19,885</td><td>$19,459</td><td>6.0x</td><td>5.7x</td><td>22.9x</td><td>21.1x</td><td>35.5x</td><td>32.0x</td><td>0.3x</td><td>(0.5x)</td></tr></table> Source: Wolfe Research, FactSet (priced as of 1/2/2026) # Key Catalysts | Life Science Tools # Reasons For Upward Estimate Revisions At current valuations, further stock appreciation will be more dependent on upward estimate revisions as multiples look increasingly full. Fortunately, sell side expectations finally look to have an upward bias. Post-MFN Deals "Psychology" Boost To Biopharma End Market Better-than-feared MFN deals could lead to an improvement in activity and equipment spending in the biopharmaceutical end market. - Reshoring - Biotech/Pharmaceutical Orders Should Start This Summer We expect to "brownfield" orders to start being announced over the summer, with revenue likely starting to be recognized in 2027. "Greenfields" will likely be a 1-2 years behind. - GLP-1 Volume Upside Translating To More Tools Demand Tools "win" regardless of how the battle for orals vs. injectables plays out (will be a focus area for delivery companies). - NIH Budget – Uncertainty Lingers, But Still Far Better Than Feared The current continuing resolution will expire January 30. Another funding bill will likely be negotiated in the next month which should give us more info on the funding outlook. Still, while uncertainty lingers, this is all much better than feared 6-9 months ago. China-More Stability? China Dx headwinds should be less acute in 2026 vs. 2025. however, 2027 may be reset for things to start trending better. Additionally, a less tariff-focused environment should be better for Tools. Applied Market Demand More PFAS testing, more food testing, etc. # Consolidation – More Deals Coming? WAT/BD, ABT/EXAS, TMO/Solventum & Clario...we started to see more dealmaking in 2025 and expect that to continue in 2026. The outstanding question: who are the buyers and who are the sellers? # Earnings Snapshot – Large Cap Tools <table><tr><td rowspan="2" colspan="4">LARGE CAPS</td><td colspan="3">Revenue ($MM)</td><td colspan="3">EPS</td></tr><tr><td>Q4</td><td>2025</td><td>2026</td><td>Q4</td><td>2025</td><td>2026</td></tr><tr><td rowspan="4">AGILENT1</td><td>Ticker</td><td>A</td><td>Street</td><td>$1,812</td><td>--</td><td>$7,356</td><td>$1.37</td><td>--</td><td>$5.94</td></tr><tr><td>Price</td><td>$138</td><td>Wolfe</td><td>$1,815</td><td>--</td><td>$7,326</td><td>$1.37</td><td>--</td><td>$5.95</td></tr><tr><td>Rating</td><td>PP</td><td rowspan="2">Guidance</td><td>$1,790-</td><td>--</td><td>$7,300-</td><td>$1.35-1.38</td><td>--</td><td>$5.86-6.00</td></tr><tr><td>Target</td><td>NA</td><td>1,820</td><td></td><td>7,400</td><td></td><td></td><td></td></tr><tr><td rowspan="4">AVANTOR</td><td>Ticker</td><td>AVTR</td><td>Street</td><td>$1,638</td><td>$6,527</td><td>$6,531</td><td>$0.22</td><td>$0.90</td><td>$0.91</td></tr><tr><td>Price</td><td>$11</td><td>Wolfe</td><td>$1,641</td><td>$6,529</td><td>$6,437</td><td>$0.22</td><td>$0.90</td><td>$0.88</td></tr><tr><td>Rating</td><td>PP</td><td rowspan="2">Guidance</td><td>--</td><td>--</td><td>--</td><td>--</td><td>$0.88 - $0.92</td><td>--</td></tr><tr><td>Target</td><td>NA</td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td rowspan="4">BRUKER</td><td>Ticker</td><td>BRKR</td><td>Street</td><td>$958</td><td>$3,417</td><td>$3,472</td><td>$0.65</td><td>$1.88</td><td>$2.14</td></tr><tr><td>Price</td><td>$48</td><td>Wolfe</td><td>$954</td><td>$3,413</td><td>$3,540</td><td>$0.66</td><td>$1.89</td><td>$2.15</td></tr><tr><td>Rating</td><td>OP</td><td rowspan="2">Guidance</td><td>--</td><td>$3,410-</td><td>--</td><td>--</td><td>$1.85-$1.90</td><td>--</td></tr><tr><td>Target</td><td>$60</td><td></td><td>$3,440</td><td></td><td></td><td></td><td></td></tr><tr><td rowspan="4">DANAHER</td><td>Ticker</td><td>DHR</td><td>Street</td><td>$6,786</td><td>$24,525</td><td>$25,516</td><td>$2.14</td><td>$7.71</td><td>$8.41</td></tr><tr><td>Price</td><td>$230</td><td>Wolfe</td><td>$6,770</td><td>$24,500</td><td>$25,418</td><td>$2.13</td><td>$7.70</td><td>$8.35</td></tr><tr><td>Rating</td><td>OP</td><td rowspan="2">Guidance</td><td>--</td><td>--</td><td>--</td><td>--</td><td>$7.70-$7.80</td><td>--</td></tr><tr><td>Target</td><td>$260</td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td rowspan="4">HLOGIC1</td><td>Ticker</td><td>HOLX</td><td>Street</td><td>$1,071</td><td>--</td><td>$4,286</td><td>$1.10</td><td>--</td><td>$4.54</td></tr><tr><td>Price</td><td>$75</td><td>Wolfe</td><td>$1,079</td><td>--</td><td>$4,287</td><td>$1.18</td><td>--</td><td>$4.54</td></tr><tr><td>Rating</td><td>PP</td><td rowspan="2">Guidance</td><td>--</td><td>--</td><td>--</td><td>--</td><td>--</td><td>--</td></tr><tr><td>Target</td><td>NA</td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td rowspan="4">ILLUMINA</td><td>Ticker</td><td>ILMN</td><td>Street</td><td>$1,101</td><td>$4,285</td><td>$4,377</td><td>$1.22</td><td>$4.71</td><td>$5.01</td></tr><tr><td>Price</td><td>$134</td><td>Wolfe</td><td>$1,100</td><td>$4,279</td><td>$4,367</td><td>$1.21</td><td>$4.70</td><td>$5.09</td></tr><tr><td>Rating</td><td>OP</td><td rowspan="2">Guidance</td><td>--</td><td>$4,270-</td><td>--</td><td>--</td><td>$4.65-$4.75</td><td>--</td></tr><tr><td>Target</td><td>$150</td><td></td><td>$4,310</td><td></td><td></td><td></td><td></td></tr></table> <table><tr><td>The Set Up / Key Model Changes</td></tr><tr><td>FQ1 - We see $10-20MM upside to top-line estimatesFY26 - We expect ~MSD organic revenue growth and ~$5.95 in EPS The Bottom Line - We see room for revenue upside, but mix could limit material EPS upside</td></tr><tr><td>Q4 - AVTR looks positioned to MEET Q4 consensus expectations.2026 - We expect AVTR to guide core growth down 2% to flat The Bottom Line - AVTR currently profiles as a tough long-pitch...that said, we would be careful on the short-side</td></tr><tr><td>Q4 - We expect at least an in line Q4 & we expect B:B of ~1.2026 - We expect LSD+ rev. growth, 200bps+ margin expansion The Bottom Line - BRKR trades at a discount to peers despite similar 2026 revenue growth outlooks and better EPS outlooks.</td></tr><tr><td>Q4 - Revenue and EPS estimates are fine2026 - We are ~$100MM below revenue consensus and $0.06 below on EPS to give the incoming CFO/team room to maneuverThe Bottom Line - There must be a path to $9/share for DHR to work</td></tr><tr><td>Shares effectively have a ceiling around $76 until the Blackstone/TPG deal closes, which is expected sometime in H1:26</td></tr><tr><td>Q4 - We believe ILMN is well-positioned to meet Street expectations.2026 - We expect LSD rev. growth overall, including MSD ex-China.The Bottom Line - If conviction builds in LT MSD+ revenue growth and a path to high-20s op. margins, there is room for material upside.</td></tr></table> <table><tr><td>Key Areas Of Focus</td></tr><tr><td>LC/MS replacement, GLP-1s, CDMO growth trajectory/margin progression, PFAS, Capital deployment</td></tr><tr><td>Outlook for new CEO: Details on (a) revenue outlook, (b) margin targets, (c) capital deployment, & (d) portfolio optimizationPrice: AVTR is still taking price overall, it has just not exceeded inflation in 2025.</td></tr><tr><td>NIH Funding: BRKR can grow even if US A&G is down ~10% in 2026 Book-to-Bill and Orders: We think B:B for Q4 could be around 1. Per BRKR, order trends in Q3 continued at least into October. China: More benefit from stimulus in Q4 and 2026?</td></tr><tr><td>Bioprocessing Equipment: DHR has not seen a meaningful increase in CapEx yet, but conversations w/ customers are trending positively. China Dx: Continues to expect $75-$100MM in China Dx headwinds, Restructuring: $150MM of spend in Q4 from restructuring</td></tr><tr><td>Blackstone/TPG take-private, Breast imaging (gantry) placements, Interventional Breast growth trajectory</td></tr><tr><td>Roche Competition: We expect Roche to officially launch the sequencer in late 2026. Though Roche has not committed to an update at AGBT, we do think price/specs could come then. Op. Margins: Can the company get to 26% over the next 2 years?</td></tr></table> 1: Off-cycle fiscal years; A ends 10/31, HOLX ends 9/30 Source: Wolfe Research, FactSet (priced as of 1/2/2026) # Earnings Snapshot – Large Cap Tools (continued) <table><tr><td rowspan="2" colspan="3">LARGE CAPS</td><td colspan="3">Revenue ($MM)</td><td colspan="3">EPS</td></tr><tr><td>Q4</td><td>2025</td><td>2026</td><td>Q4</td><td>2025</td><td>2026</td></tr><tr><td rowspan="4">METTLER</td><td>Ticker</td><td>MTD</td><td>Street</td><td>$1,103</td><td>$3,999</td><td>$4,192</td><td>$12.81</td><td>$42.20</td></tr><tr><td>Price</td><td>$1,411</td><td>Wolfe</td><td>$1,100</td><td>$3,997</td><td>$4,164</td><td>$12.75</td><td>$42.12</td></tr><tr><td>Rating</td><td>PP</td><td rowspan="2">Guidance</td><td rowspan="2">+3% LC</td><td rowspan="2">+2% LC</td><td rowspan="2">+4% LC</td><td>$12.68- $12.88</td><td>$42.05- $42.25</td></tr><tr><td>Target</td><td>NA</td><td>$12.88</td><td>$42.25</td></tr><tr><td rowspan="4">QAGEN</td><td>Ticker</td><td>QGEN</td><td>Street</td><td>$528</td><td>$2,075</td><td>$2,203</td><td>$0.60</td><td>$2.36</td></tr><tr><td>Price</td><td>$45</td><td>Wolfe</td><td>$527</td><td>$2,077</td><td>$2,200</td><td>$0.59</td><td>$2.36</td></tr><tr><td>Rating</td><td>PP</td><td rowspan="2">Guidance</td><td rowspan="2">~Flat CER</td><td rowspan="2">+4-5% CER</td><td rowspan="2">+5-7% CER</td><td>~$0.60</td><td>~$2.38</td></tr><tr><td>Target</td><td>NA</td><td>CER</td><td>CER</td></tr><tr><td rowspan="4">REIVITY</td><td>Ticker</td><td>RVTY</td><td>Street</td><td>$760</td><td>$2,844</td><td>$2,928</td><td>$1.55</td><td>$4.91</td></tr><tr><td>Price</td><td>$98</td><td>Wolfe</td><td>$752</td><td>$2,836</td><td>$2,937</td><td>$1.54</td><td>$4.90</td></tr><tr><td>Rating</td><td>PP</td><td rowspan="2">Guidance</td><td>--</td><td>$2,830-</td><td>+2-3%</td><td>--</td><td>$4.90-</td></tr><tr><td>Target</td><td>NA</td><td>--</td><td>2,880</td><td>organic</td><td>--</td><td>5.00</td></tr><tr><td rowspan="4">SARTORIUS</td><td>Ticker</td><td>SRT3-DE</td><td>Street</td><td>$936</td><td>$3,544</td><td>$3,815</td><td>€ 1.32</td><td>€ 4.97</td></tr><tr><td>Price</td><td>€ 248</td><td>Wolfe</td><td>$923</td><td>$3,533</td><td>$3,751</td><td>€ 1.57</td><td>€ 5.10</td></tr><tr><td>Rating</td><td>OP</td><td rowspan="2">Guidance</td><td rowspan="2">--</td><td rowspan="2">--</td><td rowspan="2">--</td><td rowspan="2">--</td><td rowspan="2">--</td></tr><tr><td>Target</td><td>€ 265</td></tr><tr><td rowspan="4">THERMO</td><td>Ticker</td><td>TMO</td><td>Street</td><td>$11,953</td><td>$44,290</td><td>$4,551</td><td>$6.45</td><td>$22.74</td></tr><tr><td>Price</td><td>$593</td><td>Wolfe</td><td>$11,819</td><td>$44,160</td><td>$46,260</td><td>$6.43</td><td>$22.73</td></tr><tr><td>Rating</td><td>OP</td><td rowspan="2">Guidance</td><td rowspan="2">--</td><td>$44,100-</td><td rowspan="2">--</td><td>--</td><td rowspan="2">--</td></tr><tr><td>Target</td><td>$625</td><td>$44,500</td><td>$22.60-22.86</td></tr><tr><td rowspan="4">WATERS</td><td>Ticker</td><td>WAT</td><td>Street</td><td>$928</td><td>$3,161</td><td>--</td><td>$4.51</td><td>$13.11</td></tr><tr><td>Price</td><td>$382</td><td>Wolfe</td><td>$927</td><td>$3,160</td><td>$6,030</td><td>$4.50</td><td>$13.11</td></tr><tr><td>Rating</td><td>OP</td><td rowspan="2">Guidance</td><td rowspan="2">+5.2-7.2%</td><td rowspan="2">+6.5-7.1%</td><td rowspan="2">--</td><td rowspan="2">$4.45-4.55</td><td rowspan="2">$13.05- 13.15</td></tr><tr><td>Target</td><td>$480</td></tr></table> <table><tr><td>The Set Up / Key Model Changes</td></tr><tr><td>Q4 - Q4 and FY25 estimates look de-risked</td></tr><tr><td>2026 - Street top-line estimates look a bit high</td></tr><tr><td>The Bottom Line - We see little risk to estimates, though shares continue to trade at a robust premium on most metrics</td></tr><tr><td>Q4 - Q4 and FY25 estimates look fine; could be slight upside (govt. shutdown), softening FX should help margin</td></tr><tr><td>2026 - We see room for $0.05-0.10 upside to FY26 EPS estimates</td></tr><tr><td>Q4 - Estimates look fine; mgmt. has been proactive in communicating 2026 - We model organic growth of ~-2.6% and EPS of ~$5.28 The Bottom Line - Numbers seem fairly de-risked, but we need more evidence of preclinical R&D demand</td></tr><tr><td>Q4 - Current Street estimates might not be adequately reflecting Fx. 2026 - We think Street CC estimates are still likely a little too high. The Bottom Line - Sartorius is one of the best ways to play bioprocessing right now given both the growth outlook and valuation.</td></tr><tr><td>Q4 - We feel confident in TMO's ability to meet Q4 revenue and EPS 2026 - We model organic growth of 3.0% while consensus is closer to ~4% Our intention is to give TMO room to maneuver. The Bottom Line - For stocks to continue to work we need the next move to be an upward revision of estimates.</td></tr><tr><td>Q4 - We see an upward bias of $10-20MM from Chemistry and Services 2026 - We are modeling core WAT organic growth of +6.6% Pro Forma - We expect pro forma WAT/BD to generate ~$6.03B in FY26 revenue and 100-120bp margin expansion</td></tr></table> <table><tr><td>Key Areas Of Focus</td></tr><tr><td>Pharma, Reshoring, Core Industrial, China, Process Analytics (bioprocessing and semis)</td></tr><tr><td>Sample Tech new launches, QuantiFERON competition (Roche launch), Instrument demand, Parse</td></tr><tr><td>Life Science Solutions (instruments and reagents), Pharma R&D recovery, AI, Signals Software new launches, China ImmunoDx, Capital Allocation</td></tr><tr><td>Equipment pressure: SRT expects the muted equipment environment to continue into 2026Reshoring: Reshoring will be an incremental positive though orders are still 1-2 years away for greenfields (sooner for brownfields).</td></tr><tr><td>Gov. Shutdown: The shutdown was fully contemplated in guidance Onshoring: The most immediate benefit will be seen on the CDMO side, TMO expects share gains in equipment from green-fields. M&A: Is there more coming (likely not in Services)?</td></tr><tr><td>BD Life Sciences, GLP-1s, Chemistry growth trajectory, LC replacement, China</td></tr></table> Source: Wolfe Research, FactSet (priced as of 1/2/2026) # Earnings Snapshot – SMID Cap / Specialty Tools <table><tr><td rowspan="2" colspan="3">SMID CAP / SPECIALTY TOOLS</td><td colspan="3">Revenue ($MM)</td><td colspan="3">EPS</td></tr><tr><td>Q4</td><td>2025</td><td>2026</td><td>Q4</td><td>2025</td><td>2026</td></tr><tr><td rowspan="4">10X GEN.</td><td>Ticker TXG</td><td>Street</td><td>$156</td><td>$633</td><td>$610</td><td>N/A</td><td>N/A</td><td>N/A</td></tr><tr><td>Price $17</td><td>Wolfe</td><td>$156</td><td>$633</td><td>$613</td><td>N/A</td><td>N/A</td><td>N/A</td></tr><tr><td>Rating PP</td><td>Guidance</td><td>$154-</td><td>--</td><td>--</td><td>--</td><td>--</td><td>--</td></tr><tr><td>Target NA</td><td></td><td>158</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td rowspan="4">MARAVAI</td><td>Ticker MRVI</td><td>Street</td><td>$49</td><td>$185</td><td>$203</td><td>N/A</td><td>N/A</td><td>N/A</td></tr><tr><td>Price $3</td><td>Wolfe</td><td>$49</td><td>$185</td><td>$206</td><td>N/A</td><td>N/A</td><td>N/A</td></tr><tr><td>Rating PP</td><td>Guidance</td><td>--</td><td>$185</td><td>--</td><td>--</td><td>--</td><td>--</td></tr><tr><td>Target NA</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td rowspan="4">PACBIO</td><td>Ticker PACB</td><td>Street</td><td>$42</td><td>$157</td><td>$177</td><td>N/A</td><td>N/A</td><td>N/A</td></tr><tr><td>Price $2</td><td>Wolfe</td><td>$43</td><td>$158</td><td>$179</td><td>N/A</td><td>N/A</td><td>N/A</td></tr><tr><td>Rating PP</td><td>Guidance</td><td></td><td>$155-</td><td>--</td><td>--</td><td>--</td><td>--</td></tr><tr><td>Target NA</td><td></td><td></td><td>$160</td><td></td><td></td><td></td><td></td></tr><tr><td rowspan="4">REPLICEN</td><td>Ticker RGEN</td><td>Street</td><td>$193</td><td>$733</td><td>$824</td><td>$0.44</td><td>$1.67</td><td>$2.09</td></tr><tr><td>Price $164</td><td>Wolfe</td><td>$196</td><td>$737</td><td>$833</td><td>$0.46</td><td>$1.68</td><td>$2.17</td></tr><tr><td>Rating OP</td><td>Guidance</td><td>--</td><td>$729-$737</td><td>--</td><td>$1.65-$1.68</td><td>--</td><td>--</td></tr><tr><td>Target $195</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td rowspan="4">TWIST2</td><td>Ticker TWST</td><td>Street</td><td>$100</td><td></td><td>$430</td><td>N/A</td><td>N/A</td><td>N/A</td></tr><tr><td>Price $32</td><td>Wolfe</td><td>$100</td><td></td><td>$430</td><td>N/A</td><td>N/A</td><td>N/A</td></tr><tr><td>Rating OP</td><td>Guidance</td><td>$100-</td><td>--</td><td>$425-</td><td>--</td><td>--</td><td>--</td></tr><tr><td>Target $40</td><td></td><td>$101</td><td></td><td>$435</td><td></td><td></td><td></td></tr></table> <table><tr><td>The Set Up / Key Model Changes</td></tr><tr><td>Q4 - We believe TXG is well-positioned to meet or exceed Q4</td></tr><tr><td>2026 - There is path to at least LSD growth ex-royalties, even accounting for ~flat instrument ASPs and a pricing headwind</td></tr><tr><td>The Bottom Line - Conviction in a higher growth rate needs to build to support getting more constructive</td></tr><tr><td>Q4 - Revenue expectations look reasonable</td></tr><tr><td>2026 - We expect MSD BST growth and LDD to mid-teens NAP growth</td></tr><tr><td>The Bottom Line - MRVI is likely range-bound; the growth profile is potentially improving and MRVI could be a good strategic tuck-in.</td></tr><tr><td>Q4 - We think PACB is well-positioned to meet Q4 estimates</td></tr><tr><td>2026 - We model DD rev. growth and are about $2MM above the Street.</td></tr><tr><td>The Bottom Line - We remain focused on the outlook for gross margin improvement and the path for PACB to become cash flow positive.</td></tr><tr><td>Q4 - We see little risk to Q4 organic revenue growth guidance of 8-13%</td></tr><tr><td>2026 -We expect the high end of rev. guide to be initiated at 12-13%</td></tr><tr><td>The Bottom Line - We are confident in RGEN's ability to grow 5 points above the market, however margin expansion will not be linear.</td></tr><tr><td>Q1 - We see no risk to FQ1 estimates</td></tr><tr><td>2026 -The ~14% revenue growth rate implied by the midpoint of the guide appears feasible and we see a path to faster growth.</td></tr><tr><td>The Bottom Line - TWST is still a higher growth name than the majority of the Tools universe.</td></tr></table> <table><tr><td>Key Areas Of Focus</td></tr><tr><td>Chromium Pricing: It is still too early to know how if there will be enough elasticity to off set the pricing impact Discounting: TXG still plans to do creative deals as needed. Restoration of guidance: Waiting for more clarity before restoring FY guidance.</td></tr><tr><td>Cost reductions: MRVI is working to reduce expenses by $50MM, half in COGS and half in OpEx. The full impact should be felt in 2026. Profitability: FCF+ by 2026 & adj. EBITDA positive for the FY 2026. High Volume Clean Cap: MRVI expects $10-$20MM in COVID vaccine-related CleanCap in 2026.</td></tr><tr><td>Multi-use SMRT Cell Launch: New multi-use SMRT cells should help make cost of sequencing competitive with short-read. US A&G: PACB's US A&G exposure is lower than in the past, with only one Revio a quarter going to a US A&G customer.</td></tr><tr><td>ATF: Consumables pullthrough for the blockbuster that received equipment in Q3 should start to ramp up in H2 2026. Margin Expansion: Operating expenses should grow about 75% of revenue growth in 2026 and potentially into 2027 before slowing.</td></tr><tr><td>Clinical Customer: A large clinical customer is transitioning commercially and will ramp over the course of the year. NGS Ramp: We expect sequential increases in NGS throughout the year as the large customer ramps and smaller customers also scale up.</td></tr></table> 1: Off-cycle fiscal years; TWST ends 9/31, Q4 estimates are FYQ1 Source: Wolfe Research, FactSet (priced as of 1/2/2026) # Earnings Snapshot – Drug Packaging & Delivery <table><tr><td rowspan="2" colspan="4">DRUG PACKAGING & DELIVERY</td><td colspan="3">Revenue ($MM)</td><td colspan="3">EPS</td></tr><tr><td>Q4</td><td>2025</td><td>2026</td><td>Q4</td><td>2025</td><td>2026</td></tr><tr><td rowspan="4">STEVANATO</td><td>Ticker</td><td>STVN</td><td>Street</td><td>€ 334</td><td>€ 1,174</td><td>€ 1,287</td><td>€ 0.17</td><td>€ 0.52</td><td>€ 0.63</td></tr><tr><td>Price</td><td>$21</td><td>Wolfe</td><td>€ 337</td><td>€ 1,177</td><td>€ 1,285</td><td>€ 0.18</td><td>€ 0.54</td><td>€ 0.34</td></tr><tr><td>Rating</td><td>OP</td><td>Guidance</td><td>--</td><td>€1,160-</td><td>--</td><td>--</td><td>€0.50-0.54</td><td>--</td></tr><tr><td>Target</td><td>$28</td><td></td><td></td><td>1,190</td><td></td><td></td><td></td><td></td></tr><tr><td rowspan="4">WEST</td><td>Ticker</td><td>WST</td><td>Street</td><td>$797</td><td>$3,065</td><td>$3,262</td><td>$1.83</td><td>$7.09</td><td>$7.80</td></tr><tr><td>Price</td><td>$276</td><td>Wolfe</td><td>$792</td><td>$3,061</td><td>$3,254</td><td>$1.81</td><td>$7.06</td><td>$7.79</td></tr><tr><td>Rating</td><td>PP</td><td>Guidance</td><td>$790-800</td><td>$3,060-</td><td>--</td><td>$1.81-1.86</td><td>$7.06-7.11</td><td>--</td></tr><tr><td>Target</td><td>NA</td><td></td><td></td><td>3,070</td><td></td><td></td><td></td><td></td></tr></table> <table><tr><td>The Set Up / Key Model Changes</td></tr><tr><td>Q4 - Estimates heading into YE look fine, we see ~€5-10MM top-line upside from HVS</td></tr><tr><td>2026 - Mgmt. seems comfortable with current FY26 revenue estimates of ~€1.29B, though is stressing caution on Engineering performance</td></tr><tr><td>Q4 - Q4 and FY25 estimamtes look OK, and we see room for ~$10-15MM top-line upside from HVP Components and CM (stacks)</td></tr><tr><td>2026 - We raised our FY26 organic growth forecast to +6.3%, reflective of higher growth in HVP Components, slightly offset by softer CM growth</td></tr></table> <table><tr><td>Key Areas Of Focus</td></tr><tr><td>MFN/High-Value Solutions growth, GLP-1s, Engineering orders/growth cadence, New facilities contribution/margin ramp, Vial destocking</td></tr><tr><td>2026+ commentary/LRP revision, GLP-1 growth/injectable market outlook, Delivery Devices (SmartDose), Contract Manufacturing pacing</td></tr></table> Source: Wolfe Research, FactSet (priced as of 1/2/2026) # Estimates Wolfe vs. Consensus & Estimate Changes | Large Cap Tools <table><tr><td>Q4'25E</td><td>A [FQ1E]</td><td>AVTR</td><td>BRKR</td><td>DHR</td><td>HOLX [FQ1E]</td><td>ILMN</td><td>MTD</td><td>QGEN</td><td>RVTY</td><td>SRT3-DE</td><td>TMO</td><td>WAT</td></tr><tr><td>Revenue ($MM)</td><td>$1,815</td><td>$1,641</td><td>$954</td><td>$6,770</td><td>$1,079</td><td>$1,100</td><td>$1,100</td><td>$527</td><td>$752</td><td>€ 923</td><td>$11,819</td><td>$927</td></tr><tr><td>Previous</td><td>$1,815</td><td>$1,646</td><td>$954</td><td>$6,770</td><td>$1,081</td><td>$1,111</td><td>$1,102</td><td>$527</td><td>$761</td><td>€ 929</td><td>$11,819</td><td>$929</td></tr><tr><td>Consensus</td><td>$1,812</td><td>$1,638</td><td>$958</td><td>$6,786</td><td>$1,071</td><td>$1,101</td><td>$1,103</td><td>$528</td><td>$760</td><td>€ 936</td><td>$11,953</td><td>$928</td></tr><tr><td>EPS</td><td>$1.37</td><td>$0.22</td><td>$0.66</td><td>$2.13</td><td>$1.18</td><td>$1.21</td><td>$12.75</td><td>$0.59</td><td>$1.54</td><td>€ 1.57</td><td>$6.43</td><td>$4.50</td></tr><tr><td>Previous</td><td>$1.38</td><td>$0.22</td><td>$0.65</td><td>$2.13</td><td>$1.18</td><td>$1.26</td><td>$12.74</td><td>$0.60</td><td>$1.56</td><td>€ 1.60</td><td>$6.43</td><td>$4.57</td></tr><tr><td>Consensus</td><td>$1.37</td><td>$0.22</td><td>$0.66</td><td>$2.14</td><td>$1.10</td><td>$1.22</td><td>$12.81</td><td>$0.60</td><td>$1.55</td><td>€ 1.32</td><td>$6.45</td><td>$4.51</td></tr></table> <table><tr><td>2026E</td><td>A</td><td>AVTR</td><td>BRKR</td><td>DHR</td><td>HOLX</td><td>ILMN</td><td>MTD</td><td>QGEN</td><td>RVTY</td><td>SRT3-DE</td><td>TMO</td><td>WAT1</td></tr><tr><td>Revenue ($MM)</td><td>$7,326</td><td>$6,437</td><td>$3,540</td><td>$24,418</td><td>$4,287</td><td>$4,367</td><td>$4,164</td><td>$2,200</td><td>$2,937</td><td>€ 3,751</td><td>$46,260</td><td>$6,030</td></tr><tr><td>Previous</td><td>$7,300</td><td>$6,640</td><td>$3,531</td><td>$25,415</td><td>$4,297</td><td>$4,360</td><td>$4,164</td><td>$2,158</td><td>$2,935</td><td>€ 3,780</td><td>$46,260</td><td>$6,033</td></tr><tr><td>Consensus</td><td>$7,356</td><td>$6,531</td><td>$3,472</td><td>$25,516</td><td>$4,286</td><td>$4,377</td><td>$4,192</td><td>$2,203</td><td>$2,928</td><td>€ 3,815</td><td>$46,555</td><td>--</td></tr><tr><td>EPS</td><td>$5.95</td><td>$0.88</td><td>$2.15</td><td>$8.35</td><td>$4.54</td><td>$5.09</td><td>$45.72</td><td>$2.53</td><td>$5.28</td><td>€ 6.10</td><td>$24.51</td><td>$14.78</td></tr><tr><td>Previous</td><td>$5.90</td><td>$0.92</td><td>$2.15</td><td>$8.40</td><td>$4.56</td><td>$4.95</td><td>$45.56</td><td>$2.50</td><td>$5.30</td><td>€ 6.34</td><td>$24.85</td><td>$14.83</td></tr><tr><td>Consensus</td><td>$5.94</td><td>$0.91</td><td>$2.14</td><td>$8.41</td><td>$4.54</td><td>$5.01</td><td>$45.75</td><td>$2.50</td><td>$5.30</td><td>€ 6.22</td><td>$24.62</td><td>--</td></tr></table> 1: Wolfe Pro Forma FY26 estimates (assumes March 31,2026 close) Source: Wolfe Research, FactSet; data as of December 31, 2025 # Wolfe vs. Consensus & Estimate Changes | Specialty Tools <table><tr><td>Q4'25E</td><td>MRVI</td><td>PACB</td><td>RGEN</td><td>TWST [FQ1E]</td><td>TXG</td></tr><tr><td>Revenue ($MM)</td><td>$49</td><td>$43</td><td>$196</td><td>$100</td><td>$156</td></tr><tr><td>Previous</td><td>$49</td><td>$43</td><td>$194</td><td>$100</td><td>$156</td></tr><tr><td>Consensus</td><td>$49</td><td>$42</td><td>$193</td><td>$100</td><td>$156</td></tr><tr><td>EPS</td><td>NA</td><td>NA</td><td>$0.46</td><td>NA</td><td>NA</td></tr><tr><td>Previous</td><td>NA</td><td>NA</td><td>$0.45</td><td>NA</td><td>NA</td></tr><tr><td>Consensus</td><td>NA</td><td>NA</td><td>$0.44</td><td>NA</td><td>NA</td></tr></table> <table><tr><td>2026E</td><td>MRVI</td><td>PACB</td><td>RGEN</td><td>TWST [FY26]</td><td>TXG</td></tr><tr><td>Revenue ($MM)</td><td>$206</td><td>$179</td><td>$833</td><td>$430</td><td>$613</td></tr><tr><td>Previous</td><td>$203</td><td>$179</td><td>$830</td><td>$430</td><td>$608</td></tr><tr><td>Consensus</td><td>$203</td><td>$177</td><td>$834</td><td>$430</td><td>$610</td></tr><tr><td>EPS</td><td>NA</td><td>NA</td><td>$2.17</td><td>NA</td><td>NA</td></tr><tr><td>Previous</td><td>NA</td><td>NA</td><td>$2.15</td><td>NA</td><td>NA</td></tr><tr><td>Consensus</td><td>NA</td><td>NA</td><td>$2.09</td><td>NA</td><td>NA</td></tr></table> # Wolfe vs. Consensus & Estimate Changes | Pharma Services/Outsourcing <table><tr><td>Q4’25E</td><td>STVN</td><td>WST</td></tr><tr><td>Revenue ($MM)</td><td>€ 337</td><td>$792</td></tr><tr><td>Previous</td><td>€ 335</td><td>$798</td></tr><tr><td>Consensus</td><td>€ 334</td><td>$797</td></tr><tr><td>EPS</td><td>€ 0.18</td><td>$1.81</td></tr><tr><td>Previous</td><td>€ 0.18</td><td>$1.83</td></tr><tr><td>Consensus</td><td>€ 0.17</td><td>$1.83</td></tr></table> <table><tr><td>2026E</td><td>STVN</td><td>WST</td></tr><tr><td>Revenue ($MM)</td><td>€ 1,285</td><td>$3,254</td></tr><tr><td>Previous</td><td>€ 1,275</td><td>$3,239</td></tr><tr><td>Consensus</td><td>€ 1,287</td><td>$3,262</td></tr><tr><td>EPS</td><td>€ 0.64</td><td>$7.79</td></tr><tr><td>Previous</td><td>€ 0.62</td><td>$7.80</td></tr><tr><td>Consensus</td><td>€ 0.63</td><td>$7.80</td></tr></table> # Stock Performance & Relative Valuation # Large Cap Tools – Historical Relative Valuation vs. S&P 500 Large Cap Tools Average Historical NTM P/E Large Cap Tools Average Premium (NTM P/E) vs. S&P 500 # Key Observations - Core Tools names (A, BRKR, DHR, MTD, RVTY, TMO, WAT) are collectively trading at $\sim 25x$ NTM P/E, a $11\%$ premium to the S&P 500 ( $\sim 23x$ ); for context, the 5-, 10-, 15-, and 20-year average Tools premium has been 30-40%. This is an increase from earlier this year, when Tools traded at a discount to the S&P (which has only happened a few times in the past 20 years, see above) but still below historical levels- as our colleague Chris Senyek wrote at the end of 2025, the easy money in healthcare has been made but there is still opportunity. - Notably, based on our December survey $36 \%$ of investors believe Tools should trade at a 10-20% premium to the S&P 500 and another 19% think Tools should trade at a $20 \%+$ premium. Given that (1) 2026 estimates now appear reasonable and better positioned to move up than down. and (2) multiples have SOME room/historical precedent to expand, we still an argument for attractive long-term shareholder returns from current levels. Source: Wolfe Research, FactSet (priced as of 12/31) # Large Cap Tools – Historical Relative Valuation vs. Equal Weight S&P 500 Large Cap Tools Average Historical NTM P/E Large Cap Tools Average Premium (NTM P/E) vs. Equal Weight S&P 500 # Key Observations - Given the composition of the S&P 500 has evolved over the past two decades (now more highly indexed to growthier, tech / tech-adjacent names), investors may nitpick the contention made in the previous section. This is a valid concern. That said, an observation of Core Tools valuation relative to the equal-weight S&P 500 index going back to 2010 (as far back as our data go) still shows that Tools are trading below 5-year and 10-year averages. - Core Tools names on average are currently trading at $\sim 25\mathrm{x}$ NTM P/E meanwhile the equal-weight S&P 500 is trading at $\sim 17\mathrm{x}-$ a $\sim 45\%$ premium. While this would appear "loftier" at face value as compared to the smaller premium that the group is trading at relative to the weighted S&P 500, the 10-year average historical premium to the equal-weight S&P 500 has been $\sim 50\%$ , and the 5-year average has been $60\%$ . As a result, we still see some room for multiple expansion. However, we think the majority of ground to be gained in Tools in 2026 will come from increases in estimates - looking at bellwether stock such as DHR and TMO, we see opportunity for EPS estimates to increase throughout the course of the year (as opposed to the last several years, when estimates moved down). Source: Wolfe Research, FactSet (priced as of 12/31) # Healthcare Performance by Sector (Tools vs. Healthcare) – 2025 # Context & Wolfe Take - The Life Science Tools & Services Index performed about 8-points worse than the broader healthcare index in 2025, the second weakest healthcare performer. The healthcare index overall has underperformed the broader market by $\sim 4$ points, narrowing the gap from 11 points following Q3. - Diagnostics has been the standout, up $71 \%$ YTD and outperforming the broader healthcare index by $\sim 58$ points and the market by $\sim 54$ points. - The is a reversal of trend from the "freemoney" period prior to 2020, when Life Science Tools outperformed the broader healthcare industry (all sectors) consistently for most of the decade. Healthcare Performance by Sector: 2025 Source: Wolfe Research, FactSet (priced as of 12/31) # Healthcare Performance by Sector (Tools vs. Healthcare) – Q4 # Context & Wolfe Take - The Life Science Tools & Services Index has performed about 5-points better than the broader healthcare index in Q4, the third-best healthcare performer after Diagnostics and Pharma. The healthcare index overall has outperformed the broader market by $\sim 9$ points, driven by an improvement in healthcare performance in Q4 combined with weaker ex-Healthcare performance. Healthcare Providers and Services was the worst performer in the quarter, only up 2 points, but only slightly behind the broader market. Healthcare Performance by Sector: Q4 Source: Wolfe Research, FactSet (priced as of 12/31) # Tools & Diagnostics Stock Performance – 2025 # Context & Wolfe Take The Life Science Tools and Diagnostics sector increased $\sim 10.5\%$ on average YTD. Large Cap Tools have declined $\sim 5.0\%$ YTD - driven largely by declines in AVTR, RVTY, and TECH- though cheap, each of these stocks have been subjects increasingly negative sentiment due to macro headwinds and questions about growth rates heading into 2026. Specialty Tools are up $4.4\%$ YTD, largely driven by MASS, RGEN and TXG. Sentiment around specialty tools as improved as the A&G outlook for 2026 has looked more promising. - Packaging and Delivery declined $\sim 20\%$ , driven WST, GXI-DE and 1SXP-DE. Individual Stock Performance: 2025 YTD Large Cap Tools: A, AVTR, BIO, BRKR, DHR, ILMN, MTD, QGEN, RGEN, RVTY, SRT3-DE TECH, TMO, WAT. Specialty Tools: MASS, MRVI, PACB, QTRX, SEER, TWST, TXG. Diagnostics: ADPT, CAI< CSTL, EXAS, GRAL, GH, HOLX, MYGN, NEO, NTRA, QDEL, TEM, VCYT. Packaging & Delivery: 1SXP-DE, DAE-CH, GXI-DE, STVN, WST CROs: CRL, FTRE, ICLR, IQV, MEDP CDMOs:207940-KR,LONN-SWX,SFZN-CH Note: Price performance is equal-weighted Source: Wolfe Research, FactSet (priced as of 12/31) # Tools & Diagnostics Stock Performance – Q4 # Context & Wolfe Take The Life Science Tools and Diagnostics sector improved $13.4\%$ on average in Q4. Large Cap Tools were up $16\%$ in Q4 after being down slightly in Q3- driven largely by increases in BRKR, ILMN, and WAT. Specialty Tools are up $12 \%$ in Q4, largely driven by PACB, TXG and RGEN. More confidence in at least flat A&G spending in 2026 has helped drive improvement in specialty tools. - Packaging and Delivery declined $\sim 10\%$ , driven by a $22\%$ decrease in STVN, $22\%$ decline in GXI-DE and a $28\%$ decrease in 1SXP-DE. Individual Stock Performance: Q4 Large Cap Tools: A, AVTR, BIO, BRKR, DHR, ILMN, MTD, QGEN, RGEN, RVTY, SRT3-DE TECH, TMO, WAT. Specialty Tools: MASS, MRVI, PACB, QTRX, SEER, TWST, TXG. Diagnostics: ADPT, CAI, CSTL, EXAS, GRAL, GH, HOLX, MYGN, NEO, NTRA, QDEL, TEM, VCYT. Packaging & Delivery: 1SXP-DE, DAE-CH, GXI-DE, STVN, WST. CROs: CRL, FTRE, ICLR, IQV, MEDP. CDMOs: 207940-KR, LONN-SWX, SFZN-CH Source: Wolfe Research, FactSet (priced as of 12/31) Historical Relative Valuation <table><tr><td rowspan="2">Ticker</td><td colspan="6">NTM P/E</td><td colspan="6">Premium to S&P 500</td></tr><tr><td>Current</td><td>1-Year</td><td>3-Year</td><td>5-Year</td><td>10-Year</td><td>15-Year</td><td>Current</td><td>1-Year</td><td>3-Year</td><td>5-Year</td><td>10-Year</td><td>15-Year</td></tr><tr><td colspan="13">Large Cap Tools</td></tr><tr><td>A</td><td>22.7x</td><td>21.7x</td><td>22.7x</td><td>25.2x</td><td>24.4x</td><td>21.6x</td><td>2.3%</td><td>0.1%</td><td>11.9%</td><td>26.4%</td><td>30.2%</td><td>26.1%</td></tr><tr><td>AVTR</td><td>12.7x</td><td>13.9x</td><td>17.3x</td><td>19.3x</td><td>20.1x</td><td>20.1x</td><td>(42.8%)</td><td>(36.0%)</td><td>(14.6%)</td><td>(3.5%)</td><td>7.2%</td><td>17.1%</td></tr><tr><td>BRKR</td><td>22.1x</td><td>17.2x</td><td>22.5x</td><td>25.9x</td><td>25.1x</td><td>23.4x</td><td>(0.1%)</td><td>(20.6%)</td><td>11.0%</td><td>29.9%</td><td>33.9%</td><td>36.4%</td></tr><tr><td>DHR</td><td>27.3x</td><td>25.5x</td><td>27.4x</td><td>27.7x</td><td>25.5x</td><td>21.5x</td><td>23.2%</td><td>17.7%</td><td>35.0%</td><td>38.6%</td><td>36.2%</td><td>25.4%</td></tr><tr><td>HOLX</td><td>16.0x</td><td>14.9x</td><td>17.4x</td><td>17.0x</td><td>17.4x</td><td>16.8x</td><td>(27.7%)</td><td>(31.5%)</td><td>(14.3%)</td><td>(14.7%)</td><td>(7.0%)</td><td>(2.2%)</td></tr><tr><td>MTD</td><td>30.6x</td><td>28.6x</td><td>30.0x</td><td>32.8x</td><td>31.2x</td><td>27.5x</td><td>38.2%</td><td>31.7%</td><td>47.8%</td><td>64.2%</td><td>66.5%</td><td>60.3%</td></tr><tr><td>QGEN</td><td>17.9x</td><td>18.6x</td><td>19.7x</td><td>20.8x</td><td>22.3x</td><td>20.9x</td><td>(19.2%)</td><td>(14.3%)</td><td>(3.1%)</td><td>4.2%</td><td>18.8%</td><td>22.2%</td></tr><tr><td>RVTY</td><td>18.4x</td><td>19.2x</td><td>21.5x</td><td>21.5x</td><td>20.9x</td><td>19.0x</td><td>(17.2%)</td><td>(11.4%)</td><td>5.8%</td><td>7.8%</td><td>11.3%</td><td>11.0%</td></tr><tr><td>SRT3-DE</td><td>42.1x</td><td>39.9x</td><td>44.7x</td><td>48.9x</td><td>48.4x</td><td>38.6x</td><td>90.1%</td><td>84.1%</td><td>120.2%</td><td>145.0%</td><td>158.3%</td><td>125.4%</td></tr><tr><td>TMO</td><td>23.6x</td><td>20.9x</td><td>22.7x</td><td>23.4x</td><td>21.7x</td><td>19.3x</td><td>6.6%</td><td>(3.5%)</td><td>12.0%</td><td>17.3%</td><td>16.0%</td><td>12.7%</td></tr><tr><td>WAT</td><td>26.8x</td><td>25.8x</td><td>25.1x</td><td>26.5x</td><td>24.5x</td><td>22.3x</td><td>21.0%</td><td>19.1%</td><td>23.8%</td><td>32.5%</td><td>30.7%</td><td>30.1%</td></tr><tr><td>Large Cap Tools Average</td><td>23.7x</td><td>22.4x</td><td>24.6x</td><td>26.3x</td><td>25.6x</td><td>22.8x</td><td>6.8%</td><td>3.2%</td><td>21.4%</td><td>31.6%</td><td>36.6%</td><td>33.1%</td></tr><tr><td colspan="13">Drug Packaging & Delivery</td></tr><tr><td>STVN</td><td>27.6x</td><td>34.5x</td><td>36.9x</td><td>36.6x</td><td>36.6x</td><td>36.6x</td><td>24.6%</td><td>59.0%</td><td>81.9%</td><td>83.1%</td><td>95.3%</td><td>113.5%</td></tr><tr><td>WST</td><td>35.3x</td><td>35.6x</td><td>40.2x</td><td>40.8x</td><td>39.4x</td><td>33.4x</td><td>59.4%</td><td>63.9%</td><td>98.1%</td><td>104.5%</td><td>110.3%</td><td>94.8%</td></tr><tr><td>S&P 500</td><td>22.2x</td><td>21.7x</td><td>20.3x</td><td>20.0x</td><td>18.7x</td><td>17.1x</td><td>--</td><td>--</td><td>--</td><td>--</td><td>--</td><td>--</td></tr></table> <table><tr><td rowspan="2">Ticker</td><td colspan="6">NTM EV/Sales</td><td colspan="6">Premium to S&P 500</td></tr><tr><td>Current</td><td>1-Year</td><td>3-Year</td><td>5-Year</td><td>10-Year</td><td>15-Year</td><td>Current</td><td>1-Year</td><td>3-Year</td><td>5-Year</td><td>10-Year</td><td>15-Year</td></tr><tr><td colspan="13">Specialty Tools</td></tr><tr><td>ILMN</td><td>4.5x</td><td>3.6x</td><td>4.5x</td><td>7.0x</td><td>8.7x</td><td>8.3x</td><td>18.0%</td><td>0.9%</td><td>38.7%</td><td>122.8%</td><td>209.7%</td><td>240.4%</td></tr><tr><td>MRVI</td><td>4.2x</td><td>3.5x</td><td>5.6x</td><td>8.1x</td><td>8.2x</td><td>8.2x</td><td>1