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On Friday, investment firm Baird reiterated its positive stance on Thermo Fisher Scientific (NYSE:TMO), maintaining an Outperform rating and a price target of $632.00. The firm's endorsement follows Thermo Fisher's Investor Day, where the company reaffirmed its Long Range Plan (LRP) for approximately 7%-9% organic revenue growth. Thermo Fisher's management emphasized the company's unique value proposition, its status as a trusted partner in the industry, and its robust commercial and innovation capabilities.
During the event, Thermo Fisher chose not to provide preliminary comments on its 2025 outlook. However, management expressed confidence in the company's underlying secular trends and competitive positioning, despite the current market challenges. This confidence is based on Thermo Fisher's track record and strategic initiatives that have established it as a leader in its field.
Baird highlighted Thermo Fisher's diversified portfolio and its potential for earnings per share (EPS) growth acceleration in 2025. The firm views Thermo Fisher as a top pick within the diversified tools sector, particularly for medium-term investment strategies. The company's consistent performance and growth prospects position it as a high-quality, multi-year compounder, according to Baird.
Thermo Fisher's Investor Day presentation provided investors with insights into the company's strategic direction and growth drivers. The company's focus on innovation and customer partnership has been instrumental in its success and continues to be a cornerstone of its business strategy.
In summary, Baird's outlook on Thermo Fisher remains bullish, with expectations for continued revenue growth and a strong market position. The company's reaffirmed growth targets and strategic initiatives suggest a positive trajectory for investors looking at the medium to long term.
In other recent news, Thermo Fisher Scientific has been the focus of several analyst reports. Citi maintained a Neutral rating, citing Thermo Fisher's reiteration of its long-term guidance which includes 7-9% organic growth and organic margin expansion of 40-50 basis points. The company also outlined a capital deployment strategy, anticipating 60-75% of funds directed towards mergers and acquisitions and 25-40% allocated for dividends and share buybacks.
Thermo Fisher's recent financial performance included second-quarter revenue of $10.54 billion, leading to an upward revision of its full-year guidance. The company also secured approval for its $3.1 billion acquisition of Swedish biotech firm, Olink Holding AB (NASDAQ:OLK), enhancing its position in the global life sciences industry. Thermo Fisher also declared a quarterly cash dividend of $0.39 per share.
Deutsche Bank adjusted its outlook on Thermo Fisher, raising the price target to $630 and reiterating a Buy rating. The firm also updated its 2025 earnings per share estimates for Thermo Fisher, reducing them by 3% due to a more conservative forecast for the recovery of overall market conditions.
BofA Securities, TD Cowen, and Jefferies also increased their price targets for Thermo Fisher, indicating confidence in the company's future prospects. These are all recent developments in the company's journey.
InvestingPro Insights
Thermo Fisher Scientific's management's commitment to shareholder value is reflected in its aggressive share buyback strategy and a consistent dividend increase over the past six years, showcasing financial confidence and a dedication to returning value to investors. Notably, the company has maintained dividend payments for 13 consecutive years, signaling a reliable income stream for shareholders. With a market capitalization of $236.93 billion and a robust gross profit margin of 40.69% over the last twelve months as of Q2 2024, Thermo Fisher stands out as a prominent player in the Life Sciences Tools & Services industry.
InvestingPro data indicates that Thermo Fisher is trading at a P/E ratio of 38.31, which is considered high relative to its near-term earnings growth. This high valuation is also reflected in its PEG ratio of 3.68 and a Price/Book ratio of 5.0. Despite a slight revenue decline of -2.71% over the last twelve months, the company has demonstrated a strong return over the last decade, reinforcing its position as a resilient investment. For investors seeking further insights, there are 14 additional InvestingPro Tips available, which can provide a more comprehensive understanding of Thermo Fisher's financial health and market position.
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