Thermo Fisher Scientific Faces Mixed Performance Amid Market Growth
With a market cap of $191.7 billion, Thermo Fisher Scientific Inc. (TMO) continues to be a frontrunner in the scientific field. Based in Waltham, Massachusetts, the company offers innovative solutions in life sciences, diagnostics, analytical instruments, and laboratory products.
Stock Performance Trails the Market
Over the past 52 weeks, TMO shares have not kept pace with the broader market. While TMO has risen 7.5%, the S&P 500 Index ($SPX) has seen a significant 30.5% gain. In 2024, TMO stocks also dipped by 5.6%, contrasting sharply with the SPX’s impressive 23.5% YTD gain.
Additionally, TMO fell short compared to the Health Care Select Sector SPDR Fund’s (XLV) 10% rise over the past year and a 3.5% increase year-to-date.
Q3 Earnings Show Mixed Results
Despite reporting a better-than-expected Q3 adjusted EPS of $5.28, TMO shares fell 1.7% on October 23. This decline was attributed to missing revenue forecasts, which just edged up to $10.6 billion year-over-year. The Life Sciences Solutions segment underperformed, showing a 1.9% revenue decline, missing expectations, while gross margins contracted by 20 basis points. Concerns emerged over profitability due to rising operating expenses.
Looking ahead to the current fiscal year ending in December, analysts project TMO’s EPS to grow slightly year-over-year to $21.67. The company’s recent earnings surprises have been encouraging, beating consensus estimates for four consecutive quarters.
Analysts Remain Optimistic
A total of 24 analysts currently cover TMO stock, and the consensus rating stands at “Strong Buy,” reinforced by 17 “Strong Buy” ratings, three “Moderate Buy” ratings, and four “Holds.” This optimism marks a shift from three months ago, when only 13 analysts gave a “Strong Buy” rating.
Price Target Adjustments by RBC Capital
On October 24, RBC Capital adjusted its price target on TMO to $718 while maintaining an “Outperform” rating. The firm highlighted strong momentum in bioproduction and stable sales in the Laboratory Products and Biopharma Services divisions, even amid a slowdown in biotechnology.
Currently, TMO is trading below the average price target of $655.48. The highest price target of $718 suggests a potential upside of 43.3% based on current trading levels.
On the date of publication, Sohini Mondal did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information, please view the Barchart Disclosure Policy here. More news from Barchart
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