Life sciences and diagnostics company Danaher (NYSE: DHR) is one of the big winners of the pandemic. Its life sciences solutions help medical bodies develop vaccines and therapies for COVID-19, and its diagnostic tests help detect it. The stock is up 77% since the start of 2020, and its acquisition of General Electric's biopharma business in the spring of the same year was ideally timed. That said, what can investors expect from the stock in 2022?
Danaher is not a cheap stock on a conventional basis. The stock's full-year adjusted earnings per share of $10.05 and free cash flow (FCF) of $7 billion put it on a current price-to-earnings (PE) ratio of 27 times earnings and a price-to-FCF multiple of just below 28 times FCF.
While there's no set rule to these matters, these sorts of valuations are generally held by growth stocks, with, say, double-digit earnings growth prospects. Danaher has undoubtedly come from that place over the last couple of years. As you can see below, Danaher's core revenue growth (after the initial lockdowns in the spring of 2020) has soared since the pandemic spread internationally.
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