Danaher is a global conglomerate that designs, manufactures and markets diverse lines of industrial and consumer products. We are reaffirming our Neutral recommendation with a target price of $78. In the second quarter, the company reported encouraging year-over-year revenue improvement of 5%. The company is investing more in R&D to drive product development and expansion. Recently, Danaher launched a number of new products, which are expected to contribute to the company's revenues. Apart from pursuing strategic acquisitions, the company is also able to drive organic growth and margin expansion by leveraging its DBS system. However, due to sluggish economic conditions across the globe and its narrowed outlook, we remain cautious on the stock's performance.
Danaher Corporation (DHR) is a global conglomerate that designs, manufactures and markets diverse lines of industrial and consumer products. The company was initiated as a Massachusetts based real estate investment trust. In 1978 it was reorganized as a Florida corporation under the name Diversified Mortgage Investors, Inc. which, in a second reorganization in 1980, became a subsidiary of a newly created holding company named DMG, Inc. It adopted the name Danaher in 1984 and was reincorporated as a Delaware corporation following the 1986 annual meeting of its shareholders.
Danaher derives its sales from the design, manufacture and marketing of professional, medical, industrial, commercial and consumer products.
Danaher organizes its businesses into five operating segments:
The Test & Measurement segment (17.9% for the full year 2013 revenues came from this segment). This segment is a leading global provider of electronic measurement instruments, monitoring, management and optimization tools for communications networks and related services that are used in the design, development, manufacture, installation, deployment and operation of electronics equipment and communications networks and services.
The Environmental segment (17.3% for the full year 2013 revenues came from this segment) provides products that help protect the water supply and air quality and serves two primary markets: water quality and retail/commercial petroleum.
The Life Sciences & Diagnostics segment (35.9% for the full year 2013 revenues came from this segment) offers a broad range of research and clinical tools that are used by scientists to study cells and the components of cells to gain a better understanding of complex biological matters. Pharmaceutical and biotechnology companies, universities, medical schools and research institutions use these tools and this information to study the causes of disease, identify new therapies and test new drugs and vaccines. The Diagnostics businesses offer a broad range of analytical instruments, reagents, consumables, software and services that are used to diagnose diseases, make treatment decisions and monitor patients in hospitals and other critical care settings.
The Dental segment (11.0% for the full year 2013 revenues came from this segment) is a leading worldwide provider of a broad range of equipment and consumables for the dental market, focused on developing, manufacturing and marketing innovative solutions for dental professionals around the world. The global dental market encompasses the diagnosis, treatment and prevention of diseases and ailments of the teeth, gums and supporting bone.
Industrial Technologies segment (18.0% for the full year 2013 revenues came from this segment) manufactures products and sub-systems that are typically incorporated by customers and systems integrators into production and packaging lines as well as incorporated by original equipment manufacturers (OEMs) into various end-products. Many of the businesses also provide services to support their products, including helping customers integrate and install the products and ensure product uptime.