Analyst Note| Julie Utterback, CFA |
Narrow-moat Danaher's momentum continued in the third quarter with the firm generating revenue and adjusted per share above Capital IQ consensus on strong demand for its tools used to diagnose and develop vaccines and treatments for the coronavirus. However, our assumptions for 2020 were already above consensus, and we do not anticipate changing them materially. Therefore, we maintain our fair value estimate, even though it remains well below recent share prices. For a firm likely to grow its bottom line in the low double digits after this bolus of COVID-19-related growth, we value the firm at 24 times 2020 earnings versus the market that is valuing shares at nearly 40 times.