Thermo Fisher Scientific (ticker: TMO), a leading healthcare equipment maker, has emerged as a pandemic winner by consistently driving forward without relying on disaster. According to one analyst, the company has successfully showcased its resilience and growth potential during these challenging times.
Shares of Thermo Fisher Scientific are on the rise following an upgrade by Credit Suisse analyst Dan Leonard. With a bullish outlook, Leonard raised his rating on the company to Outperform from Neutral and set a price target of $620, representing a 17% increase from the current trading level. Despite concerns among some investors about the potential downward revision of guidance after the remarkable pandemic gains, Leonard believes that Thermo Fisher and its peers in the healthcare tools sector continue to offer significant long-term growth opportunities.
Thermo Fisher’s success lies in its ability to cater to the evolving needs of the pharmaceutical industry. As new drugs and therapies require increasingly sophisticated research and development, laboratories rely on specialized instruments and services provided by Thermo Fisher. Leonard further argues that Thermo Fisher stands out among pharmaceutical suppliers due to its independently verifiable share gain. Not only did the company play a crucial role in Covid-19 testing, but it also managed to capture market share in basic lab consumables and bioprocess raw materials.
With its strong market presence and focus on meeting industry demands, Thermo Fisher Scientific continues to position itself as a leading player in the healthcare equipment sector.
Thermo Fisher: A Promising Outlook Amid Market Challenges
Thermo Fisher, a leading company in the biotech and biopharma industries, has been able to navigate the challenging market conditions caused by the pandemic. As the wave of pandemic funding recedes, investors are looking for companies with strong fundamentals and sustainable earnings growth.
One key factor that puts Thermo Fisher on solid ground is its diversified business model. In recent years, the company has expanded into clinical research and contract manufacturing, reducing its dependence on a single market segment. Currently, services account for about 40% of Thermo Fisher’s revenue, compared to 25% before the pandemic.
Despite these positive developments, Thermo Fisher’s stock price suffered a setback when first-quarter results were released in late April. The company faced challenges in its biotech and biopharma end markets, coinciding with a decline in Covid testing sales. However, experts believe this dip presents a buying opportunity.
According to Leonard, a prominent analyst, Thermo Fisher’s stock is considered a “best-of-breed” asset that is rarely available at a discounted price. Despite near-term headwinds, the company’s growth prospects remain intact. Leonard points out that Thermo Fisher’s relative valuation compared to the S&P 500 is currently below its 10-year median, indicating potential for improved returns.
Overall, Thermo Fisher’s long-term outlook remains promising. The company’s ability to adapt to changing market dynamics and its strong position in various sectors make it an attractive investment option. As of Thursday, Thermo Fisher’s stock was trading at $527.07.