Scotiabank cuts Thermo Fisher price target to $605, keeps rating

Published 25/04/2025, 13:24
Scotiabank cuts Thermo Fisher price target to $605, keeps rating

On Friday, Scotiabank (TSX:BNS) analyst Sung Ji Nam adjusted the price target for Thermo Fisher Scientific (NYSE:TMO) stock, bringing it down to $605 from the previous $650, while maintaining a Sector Perform rating. The revision follows Thermo Fisher’s first quarter results of 2025, which surpassed expectations for both revenue and earnings. The company, currently valued at $161 billion by market capitalization, is trading near its 52-week low of $409.85, presenting an interesting situation as InvestingPro analysis indicates the stock is fairly valued at current levels. Despite the positive performance, the full-year guidance for 2025 has been updated to account for the expected challenges stemming from recent changes in the macroeconomic environment.

Nam noted that while 2025 and 2026 revenue estimates are being maintained, due to a more favorable foreign exchange environment balancing a lower organic growth outlook, earnings per share (EPS) estimates for these years have been reduced. This aligns with InvestingPro data showing 20 analysts have revised their earnings downward for the upcoming period. The company maintains a P/E ratio of 25.31, which appears high relative to its near-term earnings growth prospects. For deeper insights into Thermo Fisher’s valuation metrics and growth potential, investors can access the comprehensive Pro Research Report, available exclusively on InvestingPro. This change primarily reflects the effects of newly implemented tariffs. The tariffs in question are part of the ongoing trade tensions between the U.S. and China, as well as shifts in U.S. healthcare policy that have emerged as significant factors influencing the company’s financial outlook.

Thermo Fisher’s first quarter performance in 2025 showed strong execution against stable end-markets, but the company anticipates that the newly imposed tariffs will create headwinds for the remainder of the year. However, leveraging its substantial global manufacturing and supply chain infrastructure, which includes scaled operations and redundancies, Thermo Fisher is poised to rapidly counterbalance the impact of these tariffs by the following year.

The analyst also pointed out Thermo Fisher’s proactive strategies to mitigate potential risks. This includes the company’s announcement of a $2 billion investment over the next four years to enhance biopharmaceutical manufacturing and research and development in the United States. While the potential pharmaceutical tariffs and the proposed fiscal year 2026 National Institutes of Health (NIH) budget from the White House could pose additional challenges for 2026, these factors still require Congressional appropriation to become effective.

Nam concluded by affirming Thermo Fisher’s strong position to navigate additional risks and capitalize on long-term growth opportunities, which is reflected in the adjusted price target of $605. The company’s overall financial health score of "GOOD" from InvestingPro supports this outlook, with particularly strong marks in profitability metrics. Additionally, Thermo Fisher has demonstrated commitment to shareholder returns, maintaining dividend payments for 14 consecutive years with a 10.26% dividend growth rate over the last twelve months.

In other recent news, Thermo Fisher Scientific Inc (BVMF:TMOS34). reported its first-quarter 2025 earnings, surpassing analysts’ expectations. The company achieved an adjusted earnings per share (EPS) of $5.15, exceeding the forecasted $5.11, while revenue for the quarter reached $10.36 billion, slightly above the anticipated $10.23 billion. In addition to its financial performance, Thermo Fisher announced a definitive agreement to acquire Solventum’s purification and filtration business for $4.1 billion, marking a strategic expansion in its bioproduction capabilities. Furthermore, the company plans a substantial $2 billion investment in its U.S. operations over the next four years, focusing on enhancing manufacturing and research and development. This investment includes $1.5 billion in capital expenditures and an additional $500 million dedicated to high-impact innovation. Analysts from Bank of America and Goldman Sachs have been closely monitoring Thermo Fisher’s developments, particularly the company’s ability to navigate current economic challenges. The firm’s strategic initiatives and robust financial performance underscore its resilience and adaptability in a dynamic market environment.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers
© 2007-2025 - Fusion Media Limited. All Rights Reserved.