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Danaher's (DHR) Product Offerings to Aid Amid Pandemic Scares
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We have issued an updated research report on Danaher Corporation (DHR - Free Report) on Jun 8.
The Washington, D.C.-based conglomerate specializes in designing, manufacturing and marketing diverse lines of professional, industrial, commercial and consumer products. It presently has a market capitalization of $120.8 billion and a Zacks Rank 3 (Hold). You can see the complete list of today’s Zacks #1 Rank stocks here.
There are a number of factors that are influencing Danaher’s near-term prospects. A brief discussion on important factors is provided below:
Factors Favoring Danaher
Price Performance & Multiple Tailwinds: Market sentiments have been in favor of Danaher for quite some time now. Its stock price has increased 12.8% since the beginning of 2020 compared with the industry’s decline of 9%.
The company anticipates benefiting from its solid product portfolio, innovation capabilities, an efficient workforce and Danaher Business System in the quarters ahead. For the second quarter, the company believes that spur in demand for products related to molecular diagnostics and acute care diagnostics will aid the Diagnostics segment. On the other hand, hike in demand for automation, bioprocessing and genomic products will likely be beneficial for the Life Sciences segment.
The Environmental & Applied Solutions segment will gain from high demand for consumable and water-testing products in the second quarter. Sales for coding and marking-related products will also aid results.
Inorganic Activities: The company has been investing in acquisitions over time. It acquired Labcyte Corporation in January 2019, while adding General Electric Company’s (GE - Free Report) BioPharma business to its portfolio in March 2020. Notably, the BioPharma buyout is predicted to enhance the growth opportunities of Danaher’s Life Sciences segment. This acquisition is predicted to add 2% to core sales growth in the second quarter of 2020.
Besides buyouts, Danaher also carried out a few divestments to restructure its portfolio. In September 2019, the company divested its dental business, while sold-off certain assets of its Life Sciences segment to Sartorius AG in April 2020.
Shareholder-Friendly Policies: Danaher is committed toward rewarding shareholders handsomely. It distributed dividends of $138.1 million in the first quarter of 2020, reflecting an increase of 23.1% from the year-ago quarter.
It is worth mentioning here that the company announced a hike of one cent per share in its quarterly dividend rate to 18 cents in February 2020.
Factors Working Against Danaher
Pandemic Woes: The company is wary about the adverse impacts of the pandemic on its operations. It expects second-quarter core sales change within (10%)-0% as compared with the year-ago quarter. Businesses in North America and Western Europe will likely hurt badly.
On a segmental basis, non-operational academic laboratories and reduction in testing volumes will negatively impact the Life Sciences segment in the second quarter. Moreover, lower demand for consumables and instruments will adversely impact the Diagnostics segment, while customers deferring purchase of equipment will likely impact the Environmental & Applied Solutions segment.
Leverage: High debts and related financial obligations can be concerning for Danaher. At the end of first-quarter 2020, the company’s long-term debts were $22.7 billion, reflecting an increase of 5.7% from the fourth quarter of 2019. The company’s interest expense doubled from the year-ago quarter to $47.4 million. Notably, Danaher raised $4,371.4 million from borrowing in the first quarter of 2020.
The company’s first-quarter 2020 total debt to total capital of 42.3% was above 41.5% in the previous quarter. Moreover, its ability to repay financial obligations weakened, with times interest earned decreasing from 31.4X in fourth-quarter 2019 to 25.3X in first-quarter 2020.
Woes Related to International Presence, Peers and Earnings Estimates: Danaher’s international diversification has exposed it to macroeconomic challenges, risks from unfavorable movements in foreign currencies, local competitive pressure and geopolitical issues. In first-quarter 2020, forex woes adversely impacted the company’s sales by 1.5%.
Two companies that compete with Danaher are Thermo Fisher Scientific Inc. (TMO - Free Report) and Abbott Laboratories (ABT - Free Report) .
Danaher’s earnings estimates have been lowered in the past 60 days. The Zacks Consensus Estimate is pegged at $1.02 for the second quarter, reflecting a decline of 18.4% from the 60-day-ago period. Likewise, estimates of $4.88 for 2020 and $5.72 for 2021 reflect a fall of 2.8% and 2.1% from the respective 60-day-ago figures.
Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
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Danaher's (DHR) Product Offerings to Aid Amid Pandemic Scares
We have issued an updated research report on Danaher Corporation (DHR - Free Report) on Jun 8.
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The Washington, D.C.-based conglomerate specializes in designing, manufacturing and marketing diverse lines of professional, industrial, commercial and consumer products. It presently has a market capitalization of $120.8 billion and a Zacks Rank 3 (Hold). You can see the complete list of today’s Zacks #1 Rank stocks here.
There are a number of factors that are influencing Danaher’s near-term prospects. A brief discussion on important factors is provided below:
Factors Favoring Danaher
Price Performance & Multiple Tailwinds: Market sentiments have been in favor of Danaher for quite some time now. Its stock price has increased 12.8% since the beginning of 2020 compared with the industry’s decline of 9%.
The company anticipates benefiting from its solid product portfolio, innovation capabilities, an efficient workforce and Danaher Business System in the quarters ahead. For the second quarter, the company believes that spur in demand for products related to molecular diagnostics and acute care diagnostics will aid the Diagnostics segment. On the other hand, hike in demand for automation, bioprocessing and genomic products will likely be beneficial for the Life Sciences segment.
The Environmental & Applied Solutions segment will gain from high demand for consumable and water-testing products in the second quarter. Sales for coding and marking-related products will also aid results.
Inorganic Activities: The company has been investing in acquisitions over time. It acquired Labcyte Corporation in January 2019, while adding General Electric Company’s (GE - Free Report) BioPharma business to its portfolio in March 2020. Notably, the BioPharma buyout is predicted to enhance the growth opportunities of Danaher’s Life Sciences segment. This acquisition is predicted to add 2% to core sales growth in the second quarter of 2020.
Besides buyouts, Danaher also carried out a few divestments to restructure its portfolio. In September 2019, the company divested its dental business, while sold-off certain assets of its Life Sciences segment to Sartorius AG in April 2020.
Shareholder-Friendly Policies: Danaher is committed toward rewarding shareholders handsomely. It distributed dividends of $138.1 million in the first quarter of 2020, reflecting an increase of 23.1% from the year-ago quarter.
It is worth mentioning here that the company announced a hike of one cent per share in its quarterly dividend rate to 18 cents in February 2020.
Factors Working Against Danaher
Pandemic Woes: The company is wary about the adverse impacts of the pandemic on its operations. It expects second-quarter core sales change within (10%)-0% as compared with the year-ago quarter. Businesses in North America and Western Europe will likely hurt badly.
On a segmental basis, non-operational academic laboratories and reduction in testing volumes will negatively impact the Life Sciences segment in the second quarter. Moreover, lower demand for consumables and instruments will adversely impact the Diagnostics segment, while customers deferring purchase of equipment will likely impact the Environmental & Applied Solutions segment.
Leverage: High debts and related financial obligations can be concerning for Danaher. At the end of first-quarter 2020, the company’s long-term debts were $22.7 billion, reflecting an increase of 5.7% from the fourth quarter of 2019. The company’s interest expense doubled from the year-ago quarter to $47.4 million. Notably, Danaher raised $4,371.4 million from borrowing in the first quarter of 2020.
The company’s first-quarter 2020 total debt to total capital of 42.3% was above 41.5% in the previous quarter. Moreover, its ability to repay financial obligations weakened, with times interest earned decreasing from 31.4X in fourth-quarter 2019 to 25.3X in first-quarter 2020.
Woes Related to International Presence, Peers and Earnings Estimates: Danaher’s international diversification has exposed it to macroeconomic challenges, risks from unfavorable movements in foreign currencies, local competitive pressure and geopolitical issues. In first-quarter 2020, forex woes adversely impacted the company’s sales by 1.5%.
Two companies that compete with Danaher are Thermo Fisher Scientific Inc. (TMO - Free Report) and Abbott Laboratories (ABT - Free Report) .
Danaher’s earnings estimates have been lowered in the past 60 days. The Zacks Consensus Estimate is pegged at $1.02 for the second quarter, reflecting a decline of 18.4% from the 60-day-ago period. Likewise, estimates of $4.88 for 2020 and $5.72 for 2021 reflect a fall of 2.8% and 2.1% from the respective 60-day-ago figures.
Danaher Corporation Price and Consensus
Danaher Corporation price-consensus-chart | Danaher Corporation Quote
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Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
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