< The 2015 All-America Research Team
Tycho Peterson
J.P. Morgan
First-Place Appearances: 5
Total Appearances: 6
Analyst Debut: 2010
In first place for a fifth year running is J.P. Morgan researcher Tycho Peterson. “Tycho covers a large universe of stocks yet knows them all well,” remarks one portfolio manager. “He is also very plugged in with the investment community, which is very useful in terms of gauging investor sentiment.” On the back of an uneven first-quarter reporting season, the U.S. life science and diagnostic tools group gave back some year-to-date gains in the second quarter, but it continued to outpace the broader market. Through its July high point for 2015, the sector gained 14.3 percent and led the S&P 500 by 10.9 percentage points. By mid-September it had tumbled 9.4 percent, leaving it up 3.5 percent since the end of 2014, while the broad market slumped 4.9 percent over that period. “Overall,” Peterson says, “investors remained focused on the anticipated impact of macro headwinds on end-market growth, as well as on the progress of new product rollouts and capital deployment, in particular, within the tools space, which we continue to view as ripe for consolidation.” With sector multiples at multiyear highs, the 43-year-old researcher is recommending exposure to select stocks in the space. San Diego–based Illumina continues to be his favorite in this group. The company develops tools and systems for use in genetic analysis, and he commends its new product uptake and market expansion. Peterson’s price objective for the stock is $270. It closed in mid-September at $208.88, up 17.4 percent during the preceding 12 months and ahead of its peers by 11.2 percentage points. As an M&A play, he also gives the nod to laboratory equipment provider Thermo Fisher Scientific of Waltham, Massachusetts, which the analyst projects will continue to benefit as an industry consolidator. At $160, his price target implies a 27.2 percent premium to Thermo Fisher’s trading level in mid-September.