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On Friday, Bernstein analysts maintained their positive stance on Thermo Fisher Scientific (NYSE:TMO) shares, reiterating an Outperform rating and a price target of $690.00. Currently trading at $428.06, near its 52-week low of $409.85, the stock has experienced a challenging year with a -25.39% return. The firm's analysis highlighted the potential risks and impacts of tariffs on the company, comparing it to its peers within the industry. According to InvestingPro analysis, the stock appears slightly undervalued at current levels.
Eve Burstein from Bernstein SocGen Group noted that among the companies analyzed, Thermo Fisher Scientific appeared to face the most risk from tariffs. However, the analysis also pointed out that the risks might be mitigated by the company's ability to pass increased costs onto customers due to the sticky nature of their tools. The company's financial health appears robust, with InvestingPro data showing a healthy current ratio of 1.66 and strong gross profit margins of 41.28%. Despite the risks, Bernstein's commentary suggests that Thermo Fisher Scientific's strong commercial capabilities and production exposure position it well in a challenging environment.
The analysis did not take into account certain factors, such as the potential for reciprocal tariffs, which could influence the outcome. Nevertheless, the firm's base case of impact serves as a starting point for understanding the relative risk among companies in the sector.
While the analysis made Bernstein incrementally more bearish on Thermo Fisher Scientific's stock at the current prices, the overall assessment remained positive. Bernstein believes that Thermo Fisher Scientific is a solid investment option, especially given its industry-leading commercial abilities.
Thermo Fisher Scientific, a provider of scientific instrumentation, reagents and consumables, and software services, has been evaluated amidst a backdrop of global trade uncertainties. The company's ability to navigate these challenges will be closely watched by investors and industry analysts alike.
Bernstein's maintained Outperform rating and $690 price target reflect confidence in Thermo Fisher Scientific's resilience and strategic positioning despite the potential headwinds posed by tariffs.
In other recent news, Thermo Fisher Scientific announced its agreement to acquire Solventum's Purification & Filtration business for approximately $4.1 billion in cash. This acquisition is expected to enhance Thermo Fisher's bioproduction capabilities, particularly in the development and manufacturing of biologics. Solventum's Purification & Filtration business generated around $1 billion in revenue in 2024 and employs about 2,500 people globally. The transaction is anticipated to close by the end of 2025, pending regulatory approvals and customary closing conditions.
Additionally, Thermo Fisher Scientific has appointed Karen S. Lynch, a seasoned healthcare executive, to its Board of Directors, expanding the board to twelve members. In related developments, TD Cowen has revised its price target for Thermo Fisher to $600 from $686, maintaining a Buy rating. This adjustment reflects a reassessment of financial projections due to challenges in the U.S. Academic sector and potential tariff impacts.
Meanwhile, Solventum plans to use approximately $3.4 billion in net proceeds from the sale to Thermo Fisher primarily for debt reduction. The sale is part of Solventum's strategic transformation plan to enhance focus and improve financial metrics. Trian Fund Management, an activist investor, has been advocating for further business separations at Solventum, suggesting the company should concentrate on its medical and surgical units.
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