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Thermo Fisher on an Acquisition Spree, Competition Rife
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On May 29, we issued an updated research report on Waltham, MA-based Thermo Fisher Scientific, Inc. (TMO - Free Report) , a scientific instrument maker and a world leader in serving science.
Over the past one month, Thermo Fisher has been trading above the Zacks categorized Medical - Instruments industry. Per the last trading price, the stock has gained 4.1% over that time frame, higher than the broader market’s gain of 1.8%. The company continues to see strong growth in pharma and biotech backed by solid market fundamentals and planned growth strategy. The raised 2017 guidance is also encouraging.
The company’s acquisition activities to drive growth inorganically also raise hopes. The takeover of FEI has started to contribute to Thermo Fisher’s analytical instruments portfolio. Its latest decision to acquire Pantheon is in line with its plans to expand biopharma services in Europe. The company’s other recent strategic purchases are that of Finesse Solutions and Alfa Aesar.
Meanwhile, the company plans to strengthen its foothold in emerging markets. In India, Thermo Fisher is currently working on tapping in on growth opportunities in biopharma, healthcare and food safety markets. In China, the company is performing well in key focus markets like biopharma, healthcare and environment. In South Korea, the company recently opened a BioPharma Services facility to meet the rising demand for clinical trials. We are currently looking forward to Thermo Fisher’s five-year plan, which was introduced in 2016. The plan outlines investments in innovation, healthcare and environment.
Additionally, the company has a strong cash balance that enables it to adopt attractive share repurchase programs and in turn provide solid returns to investors.
On the flip side, Thermo Fisher derives majority of its revenues from the international market, which exposes it to fluctuations in foreign currency. Management currently estimates unfavorable foreign exchange to have a negative impact on its top line in 2017.
We are also concerned about stiff competition and unfavorable macroeconomic conditions which continue to weigh on the stock. On account of its diversified portfolio, Thermo Fisher faces different categories of competitors including a broad range of manufacturers and third-party distributors. The competitive landscape is quite tough with changing technology and customer demand that require continual research and development.
Zacks Rank & Key Picks
Thermo Fisher currently carries a Zacks Rank #3 (Hold). Better-ranked stocks in the broader medical sector are Luminex Corporation , Inogen, Inc. (INGN - Free Report) and Edwards Lifesciences, Inc. (EW - Free Report) . Notably, Luminex and Inogen sport a Zacks Rank #1 (Strong Buy), while Edwards Lifesciences carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Luminex has an expected long-term adjusted earnings growth of almost 16.3%. The stock added roughly 9% over the last three months.
Inogen has a long-term expected earnings growth rate of 17.5%. The stock has a solid one-year return of roughly 84.2%.
Edwards Lifesciences recorded a stellar EPS growth rate of almost 16% (last 3–5 years of actual earnings). The stock added roughly 22% over the last three months.
More Stock News: 8 Companies Verge on Apple-Like Run
Did you miss Apple's 9X stock explosion after they launched their iPhone in 2007? Now 2017 looks to be a pivotal year to get in on another emerging technology expected to rock the market. Demand could soar from almost nothing to $42 billion by 2025. Reports suggest it could save 10 million lives per decade which could in turn save $200 billion in U.S. healthcare costs.
A bonus Zacks Special Report names this breakthrough and the 8 best stocks to exploit it. Like Apple in 2007, these companies are already strong and coiling for potential mega-gains. Click to see them right now >>
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Thermo Fisher on an Acquisition Spree, Competition Rife
On May 29, we issued an updated research report on Waltham, MA-based Thermo Fisher Scientific, Inc. (TMO - Free Report) , a scientific instrument maker and a world leader in serving science.
Over the past one month, Thermo Fisher has been trading above the Zacks categorized Medical - Instruments industry. Per the last trading price, the stock has gained 4.1% over that time frame, higher than the broader market’s gain of 1.8%. The company continues to see strong growth in pharma and biotech backed by solid market fundamentals and planned growth strategy. The raised 2017 guidance is also encouraging.
The company’s acquisition activities to drive growth inorganically also raise hopes. The takeover of FEI has started to contribute to Thermo Fisher’s analytical instruments portfolio. Its latest decision to acquire Pantheon is in line with its plans to expand biopharma services in Europe. The company’s other recent strategic purchases are that of Finesse Solutions and Alfa Aesar.
Meanwhile, the company plans to strengthen its foothold in emerging markets. In India, Thermo Fisher is currently working on tapping in on growth opportunities in biopharma, healthcare and food safety markets. In China, the company is performing well in key focus markets like biopharma, healthcare and environment. In South Korea, the company recently opened a BioPharma Services facility to meet the rising demand for clinical trials. We are currently looking forward to Thermo Fisher’s five-year plan, which was introduced in 2016. The plan outlines investments in innovation, healthcare and environment.
Additionally, the company has a strong cash balance that enables it to adopt attractive share repurchase programs and in turn provide solid returns to investors.
On the flip side, Thermo Fisher derives majority of its revenues from the international market, which exposes it to fluctuations in foreign currency. Management currently estimates unfavorable foreign exchange to have a negative impact on its top line in 2017.
We are also concerned about stiff competition and unfavorable macroeconomic conditions which continue to weigh on the stock. On account of its diversified portfolio, Thermo Fisher faces different categories of competitors including a broad range of manufacturers and third-party distributors. The competitive landscape is quite tough with changing technology and customer demand that require continual research and development.
Zacks Rank & Key Picks
Thermo Fisher currently carries a Zacks Rank #3 (Hold). Better-ranked stocks in the broader medical sector are Luminex Corporation , Inogen, Inc. (INGN - Free Report) and Edwards Lifesciences, Inc. (EW - Free Report) . Notably, Luminex and Inogen sport a Zacks Rank #1 (Strong Buy), while Edwards Lifesciences carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Luminex has an expected long-term adjusted earnings growth of almost 16.3%. The stock added roughly 9% over the last three months.
Inogen has a long-term expected earnings growth rate of 17.5%. The stock has a solid one-year return of roughly 84.2%.
Edwards Lifesciences recorded a stellar EPS growth rate of almost 16% (last 3–5 years of actual earnings). The stock added roughly 22% over the last three months.
More Stock News: 8 Companies Verge on Apple-Like Run
Did you miss Apple's 9X stock explosion after they launched their iPhone in 2007? Now 2017 looks to be a pivotal year to get in on another emerging technology expected to rock the market. Demand could soar from almost nothing to $42 billion by 2025. Reports suggest it could save 10 million lives per decade which could in turn save $200 billion in U.S. healthcare costs.
A bonus Zacks Special Report names this breakthrough and the 8 best stocks to exploit it. Like Apple in 2007, these companies are already strong and coiling for potential mega-gains. Click to see them right now >>