Back to top

Analyst Blog

We have reiterated our Neutral recommendation on Thermo Fisher Scientific (TMO - Analyst Report) with a target price of $65.00. This was primarily based on the company’s strong performance in the international market, offset by our concerns over weak government and academic markets.

Maintaining Neutral Stance

Thermo Fisher has strong international operations and witnessed consistent growth in Asia-Pacific. As a part of Thermo Fisher’s plans to focus on Asia-Pacific, it opened a new factory in Suzhou, China, in November, thus bolstering the R&D infrastructure there. The company is also optimistic about the $2 billion addressable market in India, which holds long-term opportunities in industries like pharmaceutical health care, food safety and the environment. 

Also, past acquisitions have added complementary technologies, expanded its presence in high-growth markets, and generated cost and revenue synergies, thereby increasing shareholders’ value. The most recent is the newest acquisition of One Lambda, which is likely to strengthen its foothold in the immensely potent transplant diagnostics market. We are encouraged by the company’s progress with respect to reducing manufacturing footprint.

However, the company has faced the brunt of weak government and academic markets. Many countries in Europe, grappling with debt burden, will likely curtail budgets based on the weak macroeconomic environment. Moreover, the company is exposed to fluctuations in foreign exchange.

Over the past 30 days, none of the 16 firms covering the stock made any estimate revision for the current fiscal implying they still hold similar views on the stock.

Other Stocks to Consider

While we prefer to remain on the sidelines on Thermo Fisher, other medical device stocks worth a look are Intuitive Surgical, Inc. (ISRG - Analyst Report) and Pressure BioSciences, Inc. (PBIO). Both are Zacks #1 Rank (Strong Buy) stocks.

Please login to Zacks.com or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research

Close

Are you a new Zacks Member or a visitor to Zacks.com?

Top Zacks Features

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Zacks.com. Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
RPC INC RES 24.91 +8.35%
LITHIA MOTO… LAD 94.59 +4.60%
DELTA AIR L… DAL 39.15 +3.90%
FLAMEL TECH… FLML 14.51 +3.50%
SOUTHWEST A… LUV 28.87 +2.92%