Thermo Fisher Scientific Inc.’s (TMO Quick QuoteTMO - Free Report) growth continues to benefit from a broader pickup in customer activity. The company is using acquisitions to move deeper into some of the more attractive corners of the life sciences market while strengthening ties with customers. At the same time, the company is improving its debt position while continuing to return cash to shareholders. Yet, a challenging macroeconomic environment and intense competition could weigh on Thermo Fisher’s results.

In the past year, shares of this Zacks Rank #3 (Hold) company have rallied 6.7% against the 8.2% decline of the industry. The S&P 500 composite has gained 11.4%.

The renowned medical and laboratory equipment provider has a market capitalization of $225.01 billion. With an earnings yield of 4.1%, it significantly outperforms the industry’s negative yield of 1.3%. The company’s earnings surpassed estimates in each of the trailing four quarters, delivering an average surprise of 4.4%.

Let’s take a closer look.

Upsides for TMO

Strategic Acquisitions to Boost Growth: Thermo Fisher’s acquisition strategy expands its capabilities in attractive scientific and biopharma markets while deepening customer relationships. The March 2026 acquisition of Clario added digital endpoint data capabilities that can support deeper clinical insights and improve drug-development productivity. Clario exceeded management’s expectations in the second quarter, with integration progressing as planned and the pipeline for revenue synergies building.

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The filtration and separation business acquired from Solventum also performed well, with positive customer feedback and integration advancing as planned. The business expands Thermo Fisher’s bioproduction offering across upstream and downstream workflows and is expected to contribute $125 million of adjusted operating income from revenue and cost synergies by the fifth year after closing.

Strength in End Markets: Thermo Fisher continues to gain share as customer activity improves across its end markets. In the second quarter of 2026, pharma and biotech grew at a mid-single-digit rate, with bioproduction, clinical research, and the research and safety market channel providing the biggest lift. Academic and government grew in the low single digits, while industrial and applied, and diagnostics and healthcare each posted mid-single-digit growth. Geographically, the recovery was strongest in Europe and Asia Pacific, which posted high-single-digit growth, while North America reported a low-single-digit improvement. Management now expects organic revenue growth at the upper end of its 3-4% range for 2026, reflecting better activity and continued execution.

Solvency Position and Buyback: Thermo Fisher ended the second quarter of 2026 with $4.1 billion in cash and cash equivalents and $42.5 billion in total debt. Gross debt to adjusted EBITDA improved to 3.6X from 3.8X at the end of the first quarter, while net leverage declined to 3.3X from 3.5X. The higher debt balance primarily reflects the Clario acquisition, and management continues to expect 2026 net interest expense of $660 million. The company also returned $1.2 billion to its shareholders during the quarter, including $1 billion through share repurchases and about $175 million in dividends.

What Ails TMO Stock?

Macroeconomic Risks Remain: Thermo Fisher remains exposed to changes in customer funding, capital spending and global economic conditions. Although second-quarter 2026 activity improved across the end markets, geographic performance remained uneven, with North America and China each growing only in the low single digits. The company remains sensitive to regional demand and shifts in academic, government and biotechnology spending, while tariffs, inflation and geopolitical disruptions could increase costs.

Tough Competitive Pressure: Thermo Fisher operates in rapidly changing markets and faces competition from scientific instrument manufacturers, diagnostics providers, laboratory distributors and biopharma service companies. Rivals may introduce alternative technologies, offer lower prices or bundle products and services more aggressively. Thermo Fisher must keep pace through timely product development and effective commercialization across its broad portfolio. Delays in new product launches, weaker customer adoption or slower integration of acquired capabilities could limit share gains and pressure revenue and operating results.

TMO Stock Estimate Trend

The Zacks Consensus Estimate for the company’s 2026 earnings per share (EPS) has risen 1 cent to $25.13 in the last seven days.

The same for 2026 revenues is pegged at $47.80 billion, implying 7.3% year-over-year growth. 

Key Picks

Some better-ranked stocks in the broader medical space are Veracyte (VCYT Quick QuoteVCYT - Free Report) , Globus Medical (GMED Quick QuoteGMED - Free Report) and Teleflex (TFX Quick QuoteTFX - Free Report) .

Veracyte has an earnings yield of 4.5% against the industry’s negative 1.3% yield. Shares of the company have risen 37.7% against the industry’s 5.1% decline. VCYT’s earnings outpaced estimates in each of the trailing four quarters, the average surprise being 41.8%. 

VCYT sports a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Globus Medical, sporting a Zacks Rank #1, has an earnings yield of 6% against the industry’s negative 1.3% yield. Its earnings surpassed estimates in each of the trailing four quarters, with the average surprise being 27.9%. GMED’s shares have rallied 28.9% against the industry’s 5.1% decline over the past year.

Teleflex, carrying a Zacks Rank #2 (Buy), has an estimated long-term earnings growth rate of 20.7% compared with the industry’s 12.9% growth. Its earnings beat estimates in three of the trailing four quarters and missed on one occasion, the average surprise being 3.2%. TFX’s shares have rallied 7.1% against the industry’s 5% decline over the past year.