Thermo Fisher Scientific (TMO) Launches New Research Tools As Fair Value Debate Tightens

Thermo Fisher Scientific product launches and what they mean for the stock

Thermo Fisher Scientific (TMO) has just introduced the EMPAD G2 detector and new Orbitrap Isora mass spectrometers, two product launches that give investors fresh context for thinking about the stock and its role in advanced research tools.

These launches arrive after a strong run for Thermo Fisher Scientific, with a 90-day share price return of 25.94% and a 1-year total shareholder return of 26.73%. Short-term momentum has cooled slightly with the 7-day share price return down 1.13%. At the same time, the 5-year total shareholder return of 11.06% suggests the longer-term story remains intact.

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After a strong 90 day move and with only a small gap to the average analyst target and intrinsic value estimate, the key question is whether Thermo Fisher Scientific is already fairly priced or if that spread still leaves room on the table.

Most Popular Narrative: 1.5% Undervalued

Thermo Fisher Scientific's most followed narrative puts fair value at $631.42, slightly above the last close at $622.18. This frames today's small discount as a tight valuation gap rather than a deep value situation.

The analysts have a consensus price target of $631.42 for Thermo Fisher Scientific based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $750.0, and the most bearish reporting a price target of just $520.0.

Read the complete narrative. Read the complete narrative.

Want to know what earnings trajectory, margin profile and valuation multiple need to line up for that fair value to hold? The narrative leans on a specific growth path, a higher profitability mix and a premium yet moderated P/E in a sector where expectations are already high. It also explores which of those levers carries the most weight in the model and how sensitive fair value is if any one of them shifts.

Result: Fair Value of $631.42 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, the Thermo Fisher Scientific narrative still depends on academic and government funding holding up, and on China related headwinds not worsening meaningfully from here.

Find out about the key risks to this Thermo Fisher Scientific narrative.

Another view on Thermo Fisher Scientific's valuation

While the Simply Wall St DCF model suggests Thermo Fisher Scientific is about 2% below its estimated fair value of $634.98, the market is also paying a P/E of 33x against a fair ratio of 28.5x. That gap could matter if sentiment or growth assumptions change again.

Our DCF model is only one lens on Thermo Fisher Scientific, and the detail behind it can help you decide which assumptions you agree with most. Look into how the SWS DCF model arrives at its fair value.

Next Steps

With sentiment on Thermo Fisher Scientific split between fair value and further upside, it can be helpful to see the full picture for yourself and act promptly. To weigh both sides in detail, start with the 2 key rewards and 1 important warning sign.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.