We recently initiated coverage on Thermo Fisher Scientific, Inc. (TMO) with a Neutral recommendation. We rate the stock as Neutral with a target price of $50 based on a P/E of 15.0x our fiscal 2010 EPS estimate of $3.33.
Thermo Fisher reported third quarter fiscal 2009 earnings per share of 78 cents, surpassing both the Zacks Consensus Estimate and the year-ago earnings of 76 cents. Net sales in the reported quarter declined 2% year over year to roughly $2.5 billion. In terms of business segments: Analytical Technologies revenues declined 6% year over year to $1.0 billion. Laboratory Products and Services revenues increased 1% year over year to $1.6 billion. The company has a practice of reporting inter-segment revenues which have been a negative of $118.8 million for the quarter.
Thermo Fisher expects full fiscal 2009 revenues between $9.95 billion and $10.05 billion, 4% to 5% lower than the 2008 level. Earnings per share should range between $2.95 and $3.05, a decline of 3% to 6% from the previous year’s level. We might reconsider our Neutral recommendation based on the company’s performance in the next quarter.
The company offers a wide range of products and an unmatched breadth of technologies to its customers. This differentiates Thermo Fisher from its peers and gives it a competitive edge.
Headquartered in Waltham, Massachusetts, Thermo Fisher Scientific, Inc. is a scientific instrument maker and a world leader in serving science. The company was formed through the merger of Thermo Electron Corporation with Fisher Scientific International Inc. in Nov 2006. Thermo Fisher Scientific serves its customers through two principal brands, Thermo Scientific and Fisher Scientific.
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