Thermo Fisher Scientific stock rating upgraded by Scotiabank to Sector Outperform

Investing.com - Scotiabank (TSX:BNS) upgraded Thermo Fisher Scientific (NYSE:TMO) from Sector Perform to Sector Outperform on Friday, setting a price target of $590.00. With a market capitalization of $162.6 billion, TMO currently trades at a P/E ratio of 25.2x. According to InvestingPro data, the stock appears fairly valued based on its Fair Value assessment.

The upgrade comes as Scotiabank believes TMO shares have been "disproportionately impacted" by U.S. healthcare and trade policy discussions and changes throughout 2025.

Scotiabank cited Thermo Fisher’s "unparalleled commercial scale" and anticipated enhanced region-for-region capabilities expected by 2026 as key factors supporting the company’s ability to reaccelerate growth once concerns around potential U.S. healthcare policy changes subside.

The firm also highlighted Thermo Fisher’s innovation leadership, operational execution, and cash flow potential as strengths positioning the company favorably in the life science tools industry, where it maintains its status as the largest company "by a significant margin."

Scotiabank expects more clarity around the end market environment and outlook throughout the second half of 2025, at which point it believes Thermo Fisher can further optimize its business lines and operational capabilities to align with growth opportunities in life sciences and beyond.

In other recent news, Thermo Fisher Scientific reported annual revenue exceeding $40 billion, showcasing its financial strength and commitment to shareholder value. The company has declared a quarterly cash dividend of $0.43 per share, with payouts scheduled for mid-July and October 2025. Additionally, Thermo Fisher announced a significant investment of $2 billion in its U.S. operations over the next four years, focusing on enhancing manufacturing and research capabilities. This move is expected to bolster the life sciences sector and create high-paying jobs across the country.

In leadership developments, Thermo Fisher has granted CEO Marc N. Casper performance-based restricted stock units valued at approximately $60 million, aiming to align with long-term shareholder interests. On the analyst front, Scotiabank has adjusted its price target for Thermo Fisher to $605, maintaining a Sector Perform rating. This adjustment follows first-quarter results that exceeded expectations, although full-year guidance has been revised due to macroeconomic challenges. The company is actively working to mitigate risks from newly imposed tariffs and other potential challenges.

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