Back to top

Thermo Fisher Grows on New Buyouts Amid Tough Competition

Read MoreHide Full Article

On Feb 2, we issued an updated research report on  Thermo Fisher Scientific, Inc. (TMO - Free Report) , a leading scientific instrument maker. The stock has a Zacks Rank #3 (Hold).

Thermo Fisher ended the fourth quarter on a promising note with both adjusted earnings and revenues beating the Zacks Consensus Estimate. We are encouraged by the company’s solid international performance with strong year-over-year growth in the Asia-Pacific and the emerging markets like China, South Korea and the Middle East.

Also, a series of product launches along with major progress in precision medicine initiatives has benefited the company’s performance. Thermo Fisher’s acquisition of FEI Company has already started to boost its analytical instruments portfolio.

 

Also in 2017, the company deployed $7.8 billion on strategic acquisitions, adding leading biopharma contract development and manufacturing services through Patheon. Significantly, enhancing the company’s value proposition for biopharma customers, Patheon has started to contribute to the company’s laboratory products and the services segment.

Additional good news is that Thermo Fisher has a strong cash balance enabling it to provide solid returns to investors.

Over the past three months, Thermo Fisher has successfully traded above the broader industry. The stock has rallied 17.2%, surpassing the broader industry’s 13.5% gain in the period.

The promising 2018 guidance is all the more encouraging indicating that this overall bullish trend will continue throughout the year ahead.

Last quarter, the company’s business segments were impacted by strategic investments and an unfavorable business mix. Also, competitive headwinds and rising operating costs persistently pose a threat. This apart, Thermo Fisher derives majority of its revenues from the international market, which exposes it to foreign currency fluctuations.

Key Picks

Some better-ranked stocks in the broader medical space are Abiomed (ABMD - Free Report) , athenahealth (ATHN - Free Report) and Cardinal Health (CAH - Free Report) , each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Abiomed has an expected long-term growth rate of 31.5%. The stock has soared 61.8% over the last six months, ahead of the broader industry’s performance.

athenahealth has a projected long-term growth rate of 22.3%. The stock has climbed 11.8% over the last three months, above the industry’s gain.

Cardinal Health has an expected long-term growth rate of 8.5%. Last month, the stock has gained 3.4%, higher than the industry’s rise.

Today's Stocks from Zacks' Hottest Strategies

It's hard to believe, even for us at Zacks. But while the market gained +18.8% from 2016 - Q1 2017, our top stock-picking screens have returned +157.0%, +128.0%, +97.8%, +94.7%, and +90.2% respectively.

And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - Q1 2017, the composite yearly average gain for these strategies has beaten the market more than 11X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.

See Them Free>>



More from Zacks Analyst Blog

You May Like