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1. Company Snapshot

1.a. Company Description

Thermo Fisher Scientific Inc.provides life sciences solutions, analytical instruments, specialty diagnostics, and laboratory products and biopharma services in the North America, Europe, Asia-Pacific, and internationally.The company's Life Sciences Solutions segment offers reagents, instruments, and consumables for biological and medical research, discovery, and production of drugs and vaccines, as well as diagnosis of infections and diseases; and solutions include biosciences, genetic sciences, and bio production to pharmaceutical, biotechnology, agricultural, clinical, healthcare, academic, and government markets.


Its Analytical Instruments segment provides instruments, consumables, software, and services for pharmaceutical, biotechnology, academic, government, environmental, and other research and industrial markets, as well as clinical laboratories.The company's Specialty Diagnostics segment offers liquid, ready-to-use, and lyophilized immunodiagnostic reagent kits, as well as calibrators, controls, protein detection assays, and instruments; immunodiagnostics develops, manufactures and markets complete bloodtest systems to support the clinical diagnosis and monitoring of allergy, asthma and autoimmune diseases; dehydrated and prepared culture media, collection and transport systems, instrumentation, and consumables; human leukocyte antigen typing and testing for organ transplant market; and healthcare products.Its Laboratory Products and Biopharma Services segment provides laboratory products, research and safety market channel, and pharma services and clinical research.


It offers products and services through a direct sales force, customer-service professionals, electronic commerce, and third-party distributors under Thermo Scientific; Applied Biosystems; Invitrogen; Fisher Scientific; Unity Lab Services; and Patheon and PPD.Thermo Fisher Scientific Inc.was founded in 1956 and is headquartered in Waltham, Massachusetts.

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1.b. Last Insights on TMO

Thermo Fisher Scientific Inc.'s recent performance was driven by strong Q3 earnings, beating estimates with $5.79 per share, fueled by margin growth, new launches, and AI-focused strategic initiatives. Institutional investors, such as Boston Research & Management Inc. and Aviso Financial Inc., increased their stakes by 17.6% and 9.1%, respectively. Additionally, Bulltick Wealth Management LLC boosted its holdings by 495.0%, while America First Investment Advisors LLC made a new $22.67 million investment. The company's life science solutions segment is expected to be a key growth area.

1.c. Company Highlights

2. Thermo Fisher Scientific's Q3 Earnings Beat Expectations, Raises Full-Year Guidance

Thermo Fisher Scientific reported a robust third quarter, with revenue growing 5% to $11.12 billion, adjusted operating income up 9% to $2.59 billion, and adjusted EPS increasing 10% to $5.79 per share. The company's adjusted operating margin expanded 100 basis points to 14.5%, driven by strong performance across various businesses. The actual EPS of $5.79 beat estimates of $5.5, demonstrating the company's ability to deliver differentiated performance. With a P/E Ratio of 32.63, investors are pricing in a certain level of growth, which is supported by Thermo Fisher's raised full-year guidance.

Publication Date: Oct -23

📋 Highlights
  • Revenue & Profit Growth:: Q3 revenue rose 5% to $11.12B; adjusted operating income up 9% to $2.59B and adjusted EPS grew 10% to $5.79.
  • Full-Year Guidance Raised:: Revenue now projected at $44.1–$44.5B (+$400M midpoint increase); adjusted EPS guidance $22.6–$22.86 (+$0.20 midpoint raise).
  • Capital Deployment:: $1B share repurchases completed; $7.5B allocated to M&A and $3.5B to return of capital (buybacks/dividends).
  • Segment Performance:: Pharma/biotech growth driven by bioproduction (+mid-single digits); diagnostics/healthcare down low single digits due to China market challenges.
  • Operational Efficiency:: Adjusted operating margin expanded 100bps to 14.5%; adjusted ROIC at 11.3%, with leverage ratio at 3.2x gross debt/EBITDA.

Business Trends and Segment Performance

The company's analytical instruments business saw mid-single-digit growth, driven by strong launches in mass spectrometry and cryo-electron microscopy. The clinical research business also showed improved trends, with pharma customers becoming more confident about restarting trials. However, the Diagnostics segment faced challenges in China due to pricing and reimbursement environment pressures. Despite these challenges, Thermo Fisher saw modest growth in pharma and biotech in China, with a mid-single-digit decline overall, an improvement from Q2.

Growth Strategy and Outlook

Thermo Fisher highlighted its growth strategy, including high-impact innovation, trusted partner status with customers, and an unparalleled commercial engine. Recent launches, such as the OncoMindDx Express test and the OLINK target 48 neurodegeneration panel, demonstrate the company's commitment to innovation. With a strong presence in the U.S., Thermo Fisher expects to gain a higher share in new facilities driven by onshoring announcements. The company expects organic growth to accelerate in 2024, driven by improvement in China, pharma, and biotech, and has a busy M&A pipeline to build more value.

Valuation and Capital Deployment

Thermo Fisher's EV/EBITDA ratio stands at 22.28, indicating a certain level of expectation for future growth. The company has deployed $7.5 billion on M&A and $3.5 billion on return of capital through buybacks and dividends, demonstrating its commitment to creating value for shareholders. With an ROIC of 11.3%, Thermo Fisher is delivering strong returns on investment, supported by its adjusted operating margin expansion.

Future Expectations

For 2026, Thermo Fisher expects organic growth of 3-6%, with a strong operating margin and operating income growth. Analysts estimate next year's revenue growth at 4.9%, which is in line with the company's expectations. With its strong performance and growth strategy, Thermo Fisher is well-positioned to deliver long-term value to its shareholders.

3. NewsRoom

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Market Today: WBD Sale Bids, Meta Cuts, Apple Shake-Up

Dec -04

Source: gurufocus.com

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GENinCode surges on Thermo Fisher deal to roll out heart-disease test

Dec -04

Source: proactiveinvestors.co.uk

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Market Today: Fed hopes lift stocks; AWS AI rollout; Prada-Versace deal

Dec -03

Source: gurufocus.com

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TMO Stock Benefits From New Bioprocess Design Center in Asia

Dec -03

Source:

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First Look: Airbus trims targets, AWS AI, AEO hikes outlook

Dec -03

Source: gurufocus.com

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Market Today: Deal Talks, Retail Wins, AI Chips, and Crypto Volatility

Dec -02

Source: gurufocus.com

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Thermo Fisher Scientific Deepens Investment in Asia's Biopharma Ecosystem with Expansion of Bioprocess Design Centers

Dec -02

Source: businesswire.com

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30% of the S&P 500 Is Mag 7 Tech Stocks, but This ETF Refuses to Own a Single One

Dec -02

Source: 247wallst.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (5.30%)

6. Segments

Laboratory Products and Biopharma Services

Expected Growth: 5.5%

Thermo Fisher Scientific Inc.'s Laboratory Products and Biopharma Services segment growth of 5.5% is driven by increasing demand for life sciences research, biopharmaceutical production, and COVID-19 related testing. The company's diversified portfolio, innovative products, and strategic acquisitions have enabled it to capitalize on these trends, leading to revenue growth.

Analytical Instruments

Expected Growth: 4.5%

Thermo Fisher Scientific's analytical instruments segment growth of 4.5% is driven by increasing demand for laboratory equipment, expanding applications in life sciences and pharmaceuticals, and strategic acquisitions. The company's strong portfolio of products, including chromatography and mass spectrometry systems, has enabled it to capitalize on emerging trends and gain market share.

Life Sciences Solutions

Expected Growth: 5.0%

Life Sciences Solutions' 5.0% growth is driven by increasing demand for biopharmaceuticals, government funding for research, and a robust pipeline of new therapies. Additionally, Thermo Fisher's strategic acquisitions and innovative product offerings, such as its genetic sequencing and cell therapy solutions, have expanded its market share and capabilities, fueling growth in this segment.

Specialty Diagnostics

Expected Growth: 4.0%

The Specialty Diagnostics segment of Thermo Fisher Scientific Inc. is driven by growing demand for rare disease testing, personalized medicine, and advanced diagnostic technologies. Its 4.0% growth is fueled by increased adoption of genetic testing, expanding applications in oncology, and strategic acquisitions, enabling the company to capitalize on emerging trends in precision medicine.

Eliminations

Expected Growth: 0.0%

The eliminations from Thermo Fisher Scientific Inc. show 0.0% growth, indicating a stable and neutral impact on the company's financials. This suggests that inter-segment transactions and eliminations have remained consistent, with no significant changes in business operations or structure. This stability allows for a focus on organic growth drivers within the company's core segments.

7. Detailed Products

Laboratory Instruments

Thermo Fisher Scientific offers a wide range of laboratory instruments, including spectrophotometers, chromatography systems, and microscopes, designed to support various scientific research and testing applications.

Life Science Reagents

Thermo Fisher Scientific provides a broad portfolio of life science reagents, including antibodies, proteins, and nucleic acid-based products, used in various biological research and diagnostic applications.

Biosciences

Thermo Fisher Scientific offers a range of biosciences products, including gene expression analysis, protein analysis, and cell culture media, used in various biological research and diagnostic applications.

Pharmaceutical Services

Thermo Fisher Scientific provides pharmaceutical services, including contract research, development, and manufacturing, to support the development and commercialization of pharmaceutical products.

Laboratory Consumables

Thermo Fisher Scientific offers a wide range of laboratory consumables, including pipette tips, microplates, and laboratory plastics, used in various scientific research and testing applications.

Bioproduction

Thermo Fisher Scientific provides bioproduction products and services, including cell culture media, bioreactors, and downstream processing, used in the development and manufacturing of biologics and vaccines.

Software and Informatics

Thermo Fisher Scientific offers a range of software and informatics solutions, including laboratory information management systems, electronic laboratory notebooks, and bioinformatics tools, used in various scientific research and testing applications.

8. Thermo Fisher Scientific Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Thermo Fisher Scientific Inc. has a moderate threat of substitutes due to the presence of alternative products and services in the life sciences and biotechnology industries.

Bargaining Power Of Customers

Thermo Fisher Scientific Inc. has a low bargaining power of customers due to its strong brand reputation and diversified customer base.

Bargaining Power Of Suppliers

Thermo Fisher Scientific Inc. has a moderate bargaining power of suppliers due to its dependence on a few key suppliers for raw materials and components.

Threat Of New Entrants

Thermo Fisher Scientific Inc. has a low threat of new entrants due to the high barriers to entry in the life sciences and biotechnology industries, including significant capital requirements and regulatory hurdles.

Intensity Of Rivalry

Thermo Fisher Scientific Inc. operates in a highly competitive industry with several established players, leading to a high intensity of rivalry.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 42.77%
Debt Cost 4.12%
Equity Weight 57.23%
Equity Cost 7.91%
WACC 6.29%
Leverage 74.73%

11. Quality Control: Thermo Fisher Scientific Inc. passed 5 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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IDEXX Laboratories

A-Score: 4.6/10

Value: 0.0

Growth: 7.2

Quality: 7.6

Yield: 0.0

Momentum: 7.5

Volatility: 5.3

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Agilent Technologies

A-Score: 4.5/10

Value: 1.2

Growth: 5.8

Quality: 7.4

Yield: 1.0

Momentum: 4.0

Volatility: 7.3

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Mettler-Toledo

A-Score: 4.4/10

Value: 3.0

Growth: 6.3

Quality: 7.1

Yield: 0.0

Momentum: 3.5

Volatility: 6.7

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IQVIA

A-Score: 4.1/10

Value: 3.5

Growth: 6.9

Quality: 5.4

Yield: 0.0

Momentum: 3.0

Volatility: 6.0

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Thermo Fisher

A-Score: 4.0/10

Value: 1.6

Growth: 6.1

Quality: 6.1

Yield: 0.0

Momentum: 3.0

Volatility: 7.3

1-Year Total Return ->

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Danaher

A-Score: 3.8/10

Value: 1.6

Growth: 4.0

Quality: 6.8

Yield: 1.0

Momentum: 1.5

Volatility: 7.7

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

572.77$

Current Price

572.77$

Potential

-0.00%

Expected Cash-Flows