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Thermo Fisher Rides on New Product Suite and Global Growth

Urmimala Biswas

Recently, we issued an updated research report on Thermo Fisher Scientific, Inc. TMO. The company is rapidly ramping up its inorganic growth profile, the recent takeover being that of Brammer Bio. Its strong focus on the emerging markets is also encouraging. The stock has a Zacks Rank #2 (Buy).

Over the past year, Thermo Fisher has successfully outperformed its industry. The stock has surged 30.3% versus the industry’s 2.8% dip.

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

Barring industrial and applied, the company saw strength in the other three end markets. In fact, within this space, growth was flat due to difficult year-over-year comparison. Further, the company registered solid international performance with high growth in Europe and Asia-Pacific including China.

Thermo Fisher Scientific Inc. Price

Thermo Fisher Scientific Inc. Price

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

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, the Quantis MD mass spectrometers and the Vanquish MD HPLC for clinical diagnostic laboratories.

It also broadened its global market reach by setting up a Biosciences Customer Exploration Center in Shanghai and expanding its clinical trials logistics facility in Suzhou. We are also looking forward to the recently-completed acquisition of GlaxoSmithKline’s Cork, Ireland-based active pharmaceutical ingredient manufacturing facility.

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

On the flip side, Thermo Fisher’s operating segments are getting impacted by unfavorable business mix. Competitive headwinds and escalating costs pose threat.

Other Key Picks

Some other top-ranked stocks from the broader medical space are Haemonetics Corp. HAE, National Vision Holdings, Inc. EYE and NuVasive, Inc. NUVA.

Haemonetics currently has a Zacks Rank #1 (Strong Buy) and a projected long-term earnings growth rate of 13.5%.

National Vision’s long-term earnings growth rate is estimated at 17.8%. The company currently has a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

NuVasive’s long-term earnings growth rate is anticipated at 10.9%. It currently carries a Zacks Rank of 2.

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