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Thermo Fisher Scientific Inc. (TMO) is a leading scientific instrument and medical devices maker headquartered in Waltham, Massachusetts. Valued at an impressive market cap of $230.5 billion, the company operates in three segments: Life Sciences Solutions, Analytical Instruments, and Specialty Diagnostics.
Shares of TMO have failed to match the broader market's performance over the past year. While the stock has surged 14.2% over this time frame, the S&P 500 Index ($SPX) has rallied by 26.1%. In 2024, the stock rose 13.8%, compared to SPX’s 16.5% return on a YTD basis.
Taking a closer look, TMO has surpassed the First Trust Indxx Global Medical Devices ETF (MDEV), which has gained 8% over the past year and returned 3.8% on a YTD basis.
Thermo Fisher Scientific's underperformance compared to the broader market stems from intense competition and challenges in maintaining pricing power. Economic conditions and regulatory shifts also affect the company’s profitability and operations.
However, TMO edged up 4.1% on Jul. 24 after the company released its Q2 earnings report. It topped both top and bottom-line expectations, raised its full-year revenue, and adjusted EPS guidance, impressing investors.
For the current fiscal year, ending in December, analysts expect TMO’s EPS to grow marginally year over year to $21.72. Moreover, the company’s earnings surprise history is solid, exceeding the consensus estimate in each of the last four quarters.
Thermo Fisher Scientific stock has a consensus “Strong Buy” rating overall, a step up from “Moderate Buy” three months ago. Out of 19 analysts covering the stock, 12 recommend a "Strong Buy," and three suggest a "Moderate Buy," and four advise a “Hold.”
The consensus rating is slightly more bullish than three months ago, with 11 analysts suggesting a “Strong Buy.”
On Jul. 25, TD Cowen increased its price target for Thermo Fisher Scientific to $658 from $648 and reiterated a “Buy” rating. The brokerage firm remains optimistic, citing management’s observations of normalizing demand and growth in bioproduction, pharma services, instruments/microscopy, and China.
The mean price target of $630.50 suggests a 4.4% premium from TMO's current price levels. The Street-high price target of $690 suggests an upside potential of 14.2%.
On the date of publication, Kritika Sarmah did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
