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Danaher Corporation (DHR), valued at a market cap of $164.6 billion, is a leading global life sciences and diagnostics innovator based in Washington, D.C. It designs, manufactures, and markets professional, medical, industrial, and commercial products and services worldwide through its biotechnology, life sciences, diagnostics, and environmental & applied solutions segments.
Companies valued at $10 billion or more are generally considered "large-cap" stocks, and Danaher Corporation fits this criterion perfectly, boasting a market cap exceeding the mark. DHR is known for its pioneering work in life sciences and diagnostics and strengthens its leadership by implementing Kaizen principles of continuous improvement and waste reduction through its Danaher Business System (DBS).
However, the industrial and medical device maker has slipped 19.1% from its 52-week high of $281.70, touched on Aug. 1. Shares of DHR have plunged 13.9% over the past three months, lagging behind the First Trust Indxx Global Medical Devices ETF (MDEV), which has dropped marginally over the same time frame.
In the long term, DHR is down 1.5% on a YTD basis, outpacing the MDEV’s 5.4% gains. Moreover, shares of Danaher have surged 3.8% over the past 52 weeks, compared to the ETF’s 15.5% returns over the same time frame.
However, DHR has been trading below its 50-day and 200-day moving averages since the end of October, indicating a bearish trend.
Although DHR reported better-than-expected Q3 earnings on Oct. 22, with an adjusted EPS of $1.71 and revenue of $5.8 billion, its stock fell 4% due to a weak outlook for Q4, with the company projecting low-single-digit declines in adjusted core sales. The company projected low-single-digit declines in adjusted core sales, while investors were worried by a 19.2% year-over-year decline in operating profit and significant margin contraction, signaling potential business challenges.
To emphasize the stock’s outperformance, top rival Agilent Technologies, Inc. (A) is outperforming. Shares of Agilent have gained 7.8% over the past 52 weeks but are down marginally on a YTD basis.
Wall Street is highly optimistic about DHR’s prospects. The stock has a consensus rating of "Strong Buy" from the 21 analysts covering the stock, and the mean price target of $291.30 represents a premium of 27.8% to current levels.
