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Danaher Corp DHR

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Danaher Delivers Stronger-Than-Expected 2Q Results on COVID-19 Tools; Raising Fair Value Estimate

Julie Utterback, CFA Senior Equity Analyst

Analyst Note

| Julie Utterback, CFA |

Narrow-moat Danaher reported stronger-than-expected second-quarter results on strength in its tools used to diagnose and develop vaccines and treatments for COVID-19. We've raised our fair value estimate to $138 per share from $120 previously on this strength, which we expect to continue through 2021, and on recently generated cash flows. However, our fair value estimate remains well below recent share prices, which recently traded near 35 times our raised earnings projection for 2020, and looks rich to us.

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Company Profile

Business Description

In 1984, Danaher's founders transformed a real estate organization into an industrial-focused manufacturing company. Through a series of mergers, acquisitions, and divestitures, including the Fortive separation in 2016, Danaher now focuses primarily on manufacturing scientific instruments and consumables in three segments: life sciences, diagnostics, and environmental and applied solutions. In late 2019, Danaher separated from its dental business through an initial public offering process, and in early 2020, it acquired GE's Biopharma business, now called Cytiva, which adds to its life sciences segment.

2200 Pennsylvania Avenue, North West, Suite 800W
Washington, DC, 20037-1701
T +1 202 828-0850
Sector Healthcare
Industry Diagnostics & Research
Most Recent Earnings Jun 30, 2020
Fiscal Year End Dec 31, 2020
Stock Type Classic Growth
Employees 60,000