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Investing.com - HSBC downgraded Thermo Fisher Scientific (NYSE:TMO) from Buy to Hold, while lowering its price target to $510.00 from $540.00. The $179 billion life sciences giant, currently trading at $475.03, has seen 14 analysts revise their earnings estimates downward for the upcoming period, according to InvestingPro data.
The downgrade comes as HSBC analyst Sidharth Sahoo cited concerns about the company’s medium-term growth prospects, noting that investors need more evidence to believe in a structural growth rate exceeding 7% beyond 2027.
Thermo Fisher Scientific stock has underperformed peers Danaher (NYSE:DHR) and Sartorius/Stedim year-to-date due to several factors, including lower exposure to the resilient bioprocessing sector, higher vulnerability to NIH funding cuts, and delays in pharmaceutical projects affecting its CRO business. Despite these challenges, InvestingPro analysis shows the company maintains a GOOD overall financial health score of 2.75, with revenue growing at 2.05%.
While HSBC acknowledges potential for rerating if policy-led pharmaceutical hesitation lifts and biotech funding improves, the firm points to limited visibility on growth acceleration in the medium term.
The new price target of $510 implies approximately 9% upside, with HSBC justifying a 21x price-to-earnings multiple on 2026 estimated earnings based on mid-single-digit organic revenue growth expectations. The stock currently trades at a P/E ratio of 27.37x, and according to InvestingPro’s Fair Value analysis, appears slightly overvalued at current levels.
In other recent news, Thermo Fisher Scientific reported strong financial results for the second quarter of 2025, exceeding Wall Street expectations. The company achieved an earnings per share of $5.36, surpassing the forecast of $5.23, while revenue reached $10.85 billion, higher than the predicted $10.68 billion. In another development, Bernstein SocGen Group raised its price target for Thermo Fisher Scientific to $570.00 from $560.00, maintaining an Outperform rating. This decision was influenced by the company’s robust performance, particularly in pharmaceutical R&D consumables, which grew at a mid-single-digit rate during the quarter. Additionally, Thermo Fisher announced the upcoming retirement of its CFO, Stephen Williamson, effective March 31, 2026. James R. Meyer, currently Vice President of Financial Operations, will succeed Williamson as CFO starting March 1, 2026. Meyer has been with Thermo Fisher since 2009, holding various finance roles of increasing responsibility. These developments reflect the company’s ongoing strategic and financial momentum.
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