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With a market cap of $191.7 billion, Thermo Fisher Scientific Inc. (TMO) is a global leader in serving science. Based in Waltham, Massachusetts, It provides innovative solutions across life sciences, diagnostics, analytical instruments, and laboratory products.
Shares of the scientific instrument and laboratory supplies maker have underperformed the broader market over the past 52 weeks. TMO has risen 7.5% over this time frame, while the broader S&P 500 Index ($SPX) has gained 30.5%. In 2024, TMO stock declined 5.6%, compared to SPX's 23.5% YTD gain.
In addition, TMO stock has lagged behind the Health Care Select Sector SPDR Fund's (XLV) 10% rise over the past 52 weeks and a 3.5% increase on a YTD basis.
Despite reporting better-than-expected Q3 adjusted EPS of $5.28, shares of TMO fell 1.7% on Oct. 23 due to a revenue miss, with only a modest marginal year-over-year growth to $10.6 billion. The Life Sciences Solutions segment underperformed, with a 1.9% revenue decline, missing projections, while the gross margin contracted by 20 basis points. Additionally, margin contraction and rising operating expenses raised concerns about the company's profitability going forward.
For the current fiscal year, ending in December, analysts expect TMO's EPS to grow marginally year-over-year to $21.67. The company's earnings surprise history is promising. It beat the consensus estimates in the last four quarters.
Among the 24 analysts covering the stock, the consensus rating is a “Strong Buy.” That’s based on 17 “Strong Buy” ratings, three“Moderate Buy,” and four “Holds.”
This configuration is more bullish than three months ago, with 13 “Strong Buy” ratings on the stock.
On Oct. 24, RBC Capital lowered its price target on TMO to $718 but maintains an “Outperform" rating, citing strong bioproduction momentum and stable sales in its Laboratory Products and Biopharma Services segments despite a biotech slowdown.
As of writing, TMO is trading below the mean price target of $655.48. The Street-high price target of $718, implies a potential upside of 43.3% from the current price levels.
