Raising Danaher's Fair Value Estimate on Pandemic-Related Demand; Shares Still Rich

Narrow-moat Danaher turned in strong top- and bottom-line results for the fourth quarter, helped by the omicron variant surge, that helped the firm exceed our expectations and FactSet consensus for the quarter and year. We are raising our fair value estimate 11% to $200 per share from $180 previously to reflect recent results (5%), slightly higher near-term assumptions (4%), and a lower U.S. corporate tax rate (2%). Shares still trade well above fair value, though, when considering the potential for a reset in the company's profits, as the pandemic likely turns into an endemic situation in the next couple years.