Thermo Fisher Rides on New Product Suite, Currency Woes Stay

On Dec 31, 2019, we issued an updated research report on Thermo Fisher Scientific, Inc. TMO. The company is rapidly ramping up its inorganic growth profile. The firm’s recent takeover is that of Brammer Bio. Notably, its strong focus on emerging markets is encouraging. The stock currently has a Zacks Rank #3 (Hold).

Thermo Fisher has successfully outperformed its industry over the past year. The stock has surged 53.5% compared with the industry’s 28.7% rally in the said period.

Thermo Fisher ended third-quarter 2019 on a solid note, with both EPS and revenues beating the respective Zacks Consensus Estimate. We are encouraged by the fact that three of its four business segments witnessed strong year-over-year revenue growth.

Thermo Fisher Scientific Inc. Price

Thermo Fisher Scientific Inc. Price

Thermo Fisher Scientific Inc. price | Thermo Fisher Scientific Inc. Quote

Barring industrial and applied, the company witnessed strength in the other three end markets. Within this space, growth was flat due to difficult year-over-year comparisons. Further, the company delivered solid international performance with high growth in Europe and Asia-Pacific, including China.

Also, a series of product launches with progress in precision medicine initiatives aided its advancement. During the quarter, the company unveiled a product suite comprising the TSQ Altis, Quantis MD mass spectrometers and Vanquish MD HPLC for clinical diagnostic laboratories.

Banking on improved operational efficiency, Thermo Fisher raised its 2019 revenue and earnings guidance. This, in turn, indicates that the ongoing bullish momentum will continue through the rest of 2019.

On the flip side, Thermo Fisher’s operating segments are being impacted by unfavorable business mix. In recent times, the company’s earnings were affected significantly by headwinds from foreign exchange. Competitive headwinds and escalating costs also pose threats.

Key Picks

Some better-ranked stocks from the broader medical space are Haemonetics Corporation HAE, National Vision Holdings, Inc. EYE and Medtronic plc MDT.

Haemonetics, currently carrying a Zacks Rank #1 (Strong Buy), has a projected long-term earnings growth rate of 13.5%. You can see the complete list of today’s Zacks #1 Rank stocks here.

National Vision’s long-term earnings growth rate is estimated at 17.8%. The company currently carries a Zacks Rank #2 (Buy).

Medtronic’s long-term earnings growth rate is estimated at 7.4%. It currently carries a Zacks Rank #2.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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