We are maintaining our $600 fair value estimate for wide-moat Thermo Fisher following its first-quarter results. Organic revenue declined 4% in the quarter, in line with recent trends. The company, however, noted a moderately improved demand environment, which allowed it to slightly raise the lower end of its annual revenue guidance. We reiterate our wide moat rating.
The firm's PCR-test windfall was massive, but has also led to market share gains within the instrumentation base.
The company was able to fuel its acquisition spree via access to extremely inexpensive debt. Generating excess returns on acquisitions in a current less favorable interest-rate environment might be more challenging.
|
Metric
|
TMO
|
DHR
|
MRK
|
|---|---|---|---|
Price/Earnings (Normalized) | 26.68 | 30.99 | 19.26 |
Price/Book Value | 4.75 | 3.47 | 2.41 |
Price/Sales | 5.20 | 8.29 | 3.06 |
Price/Cash Flow | 25.05 | 28.24 | 14.30 |
|
Metric
|
TMO
|
DHR
|
MRK
|
|---|---|---|---|
Quick Ratio | 1.27 | 1.34 | 0.79 |
Current Ratio | 1.75 | 1.85 | 1.42 |
Interest Coverage | 4.94 | 15.85 | 11.32 |
|
Metric
|
TMO
|
DHR
|
MRK
|
|---|---|---|---|
Return on Assets (Normalized) | 8.68% | 5.15% | 7.55% |
Return on Equity (Normalized) | 18.83% | 8.40% | 13.81% |
Return on Invested Capital (Normalized) | 11.14% | 6.02% | 10.19% |
|
Ticker
|
Name
|
Morningstar Rating for Stocks
|
Capital Allocation
|
Economic Moat
|
Market Cap
|
|---|---|---|---|---|---|
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A
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ICLR
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WAT
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LH
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