We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Here's Why You Should Hold on to Thermo Fisher (TMO) Stock Now
Read MoreHide Full Article
Thermo Fisher Scientific Inc. (TMO - Free Report) has been gaining significant revenue contributions from its COVID-19 products and services. The company’s strategic acquisitions of PPD, Inc. and PeproTech raise investors’ confidence. However, foreign exchange headwinds and stiff competition are concerning.
Over the past year, this Zacks Rank #3 (Hold) stock has gained 29.2% compared with 1.3% growth of the industry and the S&P 500 composite's rise of 15.7%.
The renowned medical and laboratory equipment provider has a market capitalization of $223.49 billion. Its fourth-quarter 2021 earnings surpassed the Zacks Consensus Estimate by 25.3%.
Over the past five years, the company’s earnings grew 24.2%, way ahead of the industry’s 9% rise. The company’s long-term expected growth rate of 14% for earnings compares with the industry’s long-term growth expectation of 15.2%.
Let’s delve deeper.
Factors at Play
COVID-Related Progress: Thermo Fisher continued to develop COVID-19 testing, vaccines and therapies during the fourth quarter of 2021 as well. The company generated $2.45 billion in COVID-19 response-related revenues in this period. The emergence of the Omicron variant drove testing demand in the quarter. For full-year 2021, the company registered total response revenues of more than $9 billion, with $2 billion raised from vaccines and therapies.
Focus on International Markets: Thermo Fisher boasts of strong international operations and has witnessed consistent growth in high-growth and emerging markets. In the fourth quarter of 2021, its Europe, Asia Pacific and China businesses grew in high single digits, while its business in the rest of the world grew mid-single digits.
Image Source: Zacks Investment Research
For full-year 2021, its business climbed in the double digits in North America while expanding by more than 25% in Europe. Thermo Fisher’s Asia-Pacific business increased more than 20% and in China it grew just under 20%. Business in the rest of the world grew in the mid-teens for 2021. The company continues to strengthen its foothold in emerging markets, such as China and India, and translate this success to other high-priority opportunities in South Korea, Russia and Brazil.
PPD Acquisition Seems Strategic: In December 2021, Thermo Fisher completed its $17.4-billion acquisition of PPD, Inc., a renowned global contract research organization providing clinical research services to the biopharma and biotech industry. Per management, the addition of PPD's leading clinical research services expands the company’s value proposition for its biotech and pharmaceutical customers, strengthening its work in bringing to market life-changing therapies that benefit patients worldwide. The acquisition is anticipated to expand Thermo Fishers’ global reach in the attractive, high-growth clinical research services industry.
Downsides
Exposure to Foreign Currency: Thermo Fisher derives more than 50% of its revenues from the international market, which exposes it to fluctuations in foreign currency rates. In the past several years, the company’s earnings were affected significantly on headwinds from foreign exchange.
Tough Competitive Pressure: On account of its diversified portfolio, Thermo Fisher faces different types of competitors, including a broad range of manufacturers and third-party distributors. The competitive landscape is quite tough, with changing technology and customer demands requiring continued research and development.
Estimate Trend
Over the past 90 days, the Zacks Consensus Estimate for Thermo Fisher’s 2022 earnings has moved 5.6% north to $22.52.
The Zacks Consensus Estimate for its 2022 revenues is pegged at $42.15 billion, suggesting a 7.5% rise from the 2021 reported figure.
Key Picks
Some better-ranked stocks in the broader medical space are McKesson Corporation (MCK - Free Report) , AMN Healthcare Services, Inc. (AMN - Free Report) and Bio-Rad Laboratories, Inc. (BIO - Free Report) .
McKesson has a long-term earnings growth rate of 11.8%. MCK has gained 56.7% compared with the industry’s 9.8% growth in the past year.
AMN Healthcare, carrying a Zacks Rank #1, has a long-term earnings growth rate of 16.2%. The company surpassed earnings estimates in the trailing four quarters, delivering a surprise of 19.5%, on average.
AMN Healthcare has outperformed its industry over the past year. AMN has gained 41.6% versus the 52.1% industry decline.
Bio-Rad reported fourth-quarter 2021 adjusted EPS of $3.21, which surpassed the Zacks Consensus Estimate by 11.9%. It currently has a Zacks Rank #2.
Bio-Rad has an earnings yield of 2.3%, which compares favorably with the industry’s negative yield. BIO surpassed earnings estimates in the trailing four quarters, the average surprise being 66.9%.
Unique Zacks Analysis of Your Chosen Ticker
Pick one free report - opportunity may be withdrawn at any time
Image: Bigstock
Here's Why You Should Hold on to Thermo Fisher (TMO) Stock Now
Thermo Fisher Scientific Inc. (TMO - Free Report) has been gaining significant revenue contributions from its COVID-19 products and services. The company’s strategic acquisitions of PPD, Inc. and PeproTech raise investors’ confidence. However, foreign exchange headwinds and stiff competition are concerning.
Over the past year, this Zacks Rank #3 (Hold) stock has gained 29.2% compared with 1.3% growth of the industry and the S&P 500 composite's rise of 15.7%.
The renowned medical and laboratory equipment provider has a market capitalization of $223.49 billion. Its fourth-quarter 2021 earnings surpassed the Zacks Consensus Estimate by 25.3%.
Over the past five years, the company’s earnings grew 24.2%, way ahead of the industry’s 9% rise. The company’s long-term expected growth rate of 14% for earnings compares with the industry’s long-term growth expectation of 15.2%.
Let’s delve deeper.
Factors at Play
COVID-Related Progress: Thermo Fisher continued to develop COVID-19 testing, vaccines and therapies during the fourth quarter of 2021 as well. The company generated $2.45 billion in COVID-19 response-related revenues in this period. The emergence of the Omicron variant drove testing demand in the quarter. For full-year 2021, the company registered total response revenues of more than $9 billion, with $2 billion raised from vaccines and therapies.
Focus on International Markets: Thermo Fisher boasts of strong international operations and has witnessed consistent growth in high-growth and emerging markets. In the fourth quarter of 2021, its Europe, Asia Pacific and China businesses grew in high single digits, while its business in the rest of the world grew mid-single digits.
For full-year 2021, its business climbed in the double digits in North America while expanding by more than 25% in Europe. Thermo Fisher’s Asia-Pacific business increased more than 20% and in China it grew just under 20%. Business in the rest of the world grew in the mid-teens for 2021. The company continues to strengthen its foothold in emerging markets, such as China and India, and translate this success to other high-priority opportunities in South Korea, Russia and Brazil.
PPD Acquisition Seems Strategic: In December 2021, Thermo Fisher completed its $17.4-billion acquisition of PPD, Inc., a renowned global contract research organization providing clinical research services to the biopharma and biotech industry. Per management, the addition of PPD's leading clinical research services expands the company’s value proposition for its biotech and pharmaceutical customers, strengthening its work in bringing to market life-changing therapies that benefit patients worldwide. The acquisition is anticipated to expand Thermo Fishers’ global reach in the attractive, high-growth clinical research services industry.
Downsides
Exposure to Foreign Currency: Thermo Fisher derives more than 50% of its revenues from the international market, which exposes it to fluctuations in foreign currency rates. In the past several years, the company’s earnings were affected significantly on headwinds from foreign exchange.
Tough Competitive Pressure: On account of its diversified portfolio, Thermo Fisher faces different types of competitors, including a broad range of manufacturers and third-party distributors. The competitive landscape is quite tough, with changing technology and customer demands requiring continued research and development.
Estimate Trend
Over the past 90 days, the Zacks Consensus Estimate for Thermo Fisher’s 2022 earnings has moved 5.6% north to $22.52.
The Zacks Consensus Estimate for its 2022 revenues is pegged at $42.15 billion, suggesting a 7.5% rise from the 2021 reported figure.
Key Picks
Some better-ranked stocks in the broader medical space are McKesson Corporation (MCK - Free Report) , AMN Healthcare Services, Inc. (AMN - Free Report) and Bio-Rad Laboratories, Inc. (BIO - Free Report) .
McKesson, carrying a Zacks Rank #2 (Buy), reported third-quarter fiscal 2022 adjusted EPS of $6.15, which beat the Zacks Consensus Estimate of $5.38 by 14.3%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
McKesson has a long-term earnings growth rate of 11.8%. MCK has gained 56.7% compared with the industry’s 9.8% growth in the past year.
AMN Healthcare, carrying a Zacks Rank #1, has a long-term earnings growth rate of 16.2%. The company surpassed earnings estimates in the trailing four quarters, delivering a surprise of 19.5%, on average.
AMN Healthcare has outperformed its industry over the past year. AMN has gained 41.6% versus the 52.1% industry decline.
Bio-Rad reported fourth-quarter 2021 adjusted EPS of $3.21, which surpassed the Zacks Consensus Estimate by 11.9%. It currently has a Zacks Rank #2.
Bio-Rad has an earnings yield of 2.3%, which compares favorably with the industry’s negative yield. BIO surpassed earnings estimates in the trailing four quarters, the average surprise being 66.9%.