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Danaher Corp DHR

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Danaher's Momentum Continues in Q3 on Coronavirus-Related Benefits; No Fair Value Estimate Change

Julie Utterback, CFA Senior Equity Analyst

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.

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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 Sep 30, 2020
Fiscal Year End Dec 31, 2020
Stock Type Classic Growth
Employees 60,000