Stock market today: Stocks fall as investors rotate out of tech into Jackson Hole
Investing.com -- William Blair initiated coverage of Thermo Fisher Scientific (NYSE:TMO) with an Outperform rating, given company’s dominant role as a one-stop services partner for the biopharma industry and potential for sustained growth through acquisitions.
“The synergies created by Thermo’s best-in-class service offerings have solidified its position as the partner of choice for the biopharma industry,” said analyst
Thermo’s lab products and biopharma services unit now accounts for over 60% of that segment’s revenue and about a third of total company sales, driven by years of acquisitions and organic investments.
While biopharma end markets are soft in the near term, Thermo’s breadth of services positions it well for long-term demand, the note said.
Blair expects mergers and acquisitions to remain a core growth driver, pointing to Thermo’s track record of integrating targets, extracting cost synergies and improving returns on invested capital.
The company’s recently expanded footprint in proteomics, bolstered by its Olink acquisition, gives it a strong position in a fast-growing ‘omics’ segment, the analysts added.
The bank models $27.17 in EPS by 2027 and projects the valuation multiple returning to around 22x, in line with its historical average, implying a share price of about $598 by the end of 2026, or roughly 22% upside from today’s levels.
Blair highlighted risks around continued exposure to biopharma, reliance on government-funded markets and China revenue, plus a potential drag on margins as the business mix shifts.
Even so, the firm said Thermo Fisher’s leading service platform and M&A runway make the stock attractive at current levels.