TMO - Thermo Fisher: Renewed Growth Yet To Materialize But Already Priced In (Rating Downgrade)
2024-04-30 00:07:14 ET
Summary
- Thermo Fisher is expected to have near zero revenue and earnings growth in 2024 despite the decline in COVID-19 testing revenue being now immaterial.
- Renewed funding of biotech startups and stimulus in China should help revive growth in the short term.
- In the long term, the growth thesis for TMO's business is still intact, with growing demand from healthcare as well as semiconductor and battery manufacturing.
- Thermo Fisher stock price is near my fair value estimate. While Thermo is a great company, I downgraded the stock to Hold.
On Track For A Flat Year
When I last covered Thermo Fisher Scientific ( TMO ) in October 2023 , the company had just announced its planned acquisition of Swedish proteomics company Olink (OLK). As I discussed in that article, this deal is typical of Thermo's successful M&A-focused growth strategy, but nothing particularly transformative. Nevertheless, I maintained a Buy rating on Thermo stock, as it was trading at $467.26, below the $500-$600 range in which it has spent most of the time since mid-2021....
Thermo Fisher: Renewed Growth Yet To Materialize, But Already Priced In (Rating Downgrade)