On Dec 13, we reiterated our Neutral recommendation on
) largely due to its modest third quarter performance. We prefer
to remain on the sidelines until we see substantial organic
growth and improvement in the overall industry environment.
Why a Neutral Recommendation?
On Oct 17, Danaher reported its third-quarter results, wherein
the bottom and top lines beat the Zacks Consensus Estimate by
1.2% and 2.1%, respectively. The healthy increase in
earnings was mainly attributable to core revenue growth and
better margin expansion. Specific initiatives for new product
development and increased investments were also positive drivers
for the company.
Overall we are encouraged by the company's performance in the
last quarter. The company is investing more in R&D to drive
product development and expansion. In the third quarter, Danaher
also launched a couple of new diagnostic equipment, namely AU5800
and DxH 600, which would contribute to its revenues going
forward. The company was also able to drive organic growth and
margin expansion, driven by its Danaher Business System
However, Danaher's revenues declined in two of its segments -
Environmental and Test & Measurement in the reported quarter.
Also, prevailing soft economic conditions in the U.S and some
parts of Europe, along with tougher comparables and trimmed
fiscal outlook are providing limited visibility into company's
future. Thus, we prefer to remain on the sidelines and maintain
our Neutral recommendation on Danaher.
Other Stocks to Consider
Danaher currently has a Zacks Rank #3 (Hold). Some other
players in the industry worth mentioning include
Hutchison Whampoa Limited
). All these three stocks carry a Zacks Rank #2 (Buy).
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