Credit Suisse Downgrades Danaher Corporation Rating to ‘Neutral’ Amid Inventroy Reductions, Diagnostics Challenges
January 8, 2023
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Danaher Corporation ($NYSE:DHR) is a globally diversified technology company that designs, manufactures, and markets professional, medical, industrial, and consumer products and services. The company has a long history of success, having reported positive revenue growth for six consecutive years. Credit Suisse has recently downgraded Danaher Corporation from an ‘Outperform’ to a ‘Neutral’ rating due to potential pressure on growth from bioprocessing inventory reductions and diagnostics. Analyst Dan Leonard highlighted that the company has decreased its expected growth in the bioprocess business and inventory burn could continue for the next two years before returning to normal. With this downgrade, Credit Suisse also lowered its price target to $300 from $315. The bioprocess business has been a major source of revenue for Danaher Corporation and any reduction in growth could have a significant impact on the company’s performance.
In addition, the diagnostics division has been facing challenges due to the current healthcare environment and changes in reimbursement policies. These factors could put further pressure on Danaher’s earnings and profitability in the near future. Overall, Danaher Corporation is going through a difficult period and investors should be cautious when investing in the stock. The downgrade by Credit Suisse is a clear indication that the company is facing some short-term headwinds which could ultimately affect its long-term growth prospects. Investors should keep a close eye on the company’s performance and assess their risk tolerance before investing in the stock.
Stock Price
On Thursday, Credit Suisse downgraded the rating of Danaher Corporation from ‘Outperform’ to ‘Neutral’, citing inventory reductions and challenges in the diagnostics business. The market reacted to the news and Danaher Corporation stock opened at $259.0 and closed at $255.2, representing a 4.2% drop from the previous closing price of 266.4. This downgrade follows a period of mostly positive media coverage for Danaher Corporation. Credit Suisse believes that this will result in a further decline in earnings in the near future. Despite the downgrade, analysts remain optimistic about Danaher’s future outlook. Analysts point to various growth initiatives, such as its strategic acquisitions, cost optimization, and focus on developing innovative products and services, which could help the company mitigate any future losses.
In addition, the company’s focus on digital transformation is seen as a major positive for the long-term growth prospects of the business. Live Quote…
About the Company
Income Snapshot
Below shows the total revenue, net income and net margin for Danaher Corporation. More…
| Total Revenues | Net Income | Net Margin |
| 31.25k | 6.64k | 22.2% |
Cash Flow Snapshot
Below shows the cash from operations, investing and financing for Danaher Corporation. More…
| Operations | Investing | Financing |
| 8.31k | -2.3k | -3.09k |
Balance Sheet Snapshot
Below shows the total assets, liabilities and book value per share for Danaher Corporation. More…
| Total Assets | Total Liabilities | Book Value Per Share |
| 81.03k | 34.04k | 64.55 |
Key Ratios Snapshot
Some of the financial key ratios for Danaher Corporation are shown below. More…
| 3Y Rev Growth | 3Y Operating Profit Growth | Operating Margin |
| 15.2% | 35.9% | 26.8% |
| FCF Margin | ROE | ROA |
| 22.6% | 11.2% | 6.5% |
VI Analysis
DANAHER CORPORATION is a medium risk investment according to VI Risk Rating. This rating is based on the company’s fundamentals, which reflect its long term potential. The VI App has detected 3 risk warnings in the income sheet, balance sheet, and cashflow statement. When assessing a company, investors should consider its financial metrics, such as profitability, leverage, and liquidity. DANAHER CORPORATION’s financial metrics are generally stable, but with some risks. For example, the company’s current ratio, which measures its ability to meet short-term obligations, is slightly lower than the industry average. Similarly, the company’s total debt to equity ratio is higher than the industry average. The company’s cash flow statement also shows some risks. In particular, DANAHER CORPORATION’s operating cash flow has declined in recent years, indicating that the company’s operating activities are not generating enough cash to cover its expenses. Similarly, free cash flow is negative and has been trending downwards over the last few years. This indicates that the company is not generating enough cash to cover its capital expenditures and dividend payments. Overall, DANAHER CORPORATION is a medium risk investment. Investors should be aware of the risks outlined above and monitor the company’s performance closely. Registering with VI App will allow investors to view the risk warnings in more detail and make an informed investment decision. More…
VI Peers
Danaher Corp is a large company that operates in many different industries. Its main competitors are Abingdon Health PLC, Charles River Laboratories International Inc, and Dirui Industrial Co Ltd.
– Abingdon Health PLC ($LSE:ABDX)
Abingdon Health is a medical technology company that develops, manufactures, and markets diagnostic products and services for the early detection and monitoring of disease. The company has a market capitalization of 8.22 million as of 2022 and a return on equity of -39.58%. Abingdon Health’s products are used in a variety of settings, including primary care, hospitals, and clinics. The company’s products are designed to provide accurate and actionable information to clinicians to improve patient care and outcomes.
– Charles River Laboratories International Inc ($NYSE:CRL)
River Laboratories is a global provider of drug discovery, development and manufacturing services. The company has a market cap of $10.15 billion and a return on equity of 13.86%. River Laboratories offers a range of services to its clients, including preclinical and clinical research, manufacturing and packaging, and analytical testing. The company has a strong focus on quality and compliance, and works with clients to ensure that their products meet all regulatory requirements. River Laboratories is headquartered in Wilmington, Massachusetts.
– Dirui Industrial Co Ltd ($SZSE:300396)
Drui Industrial Co Ltd is a company that manufactures and sells medical devices. The company has a market cap of 6.61B as of 2022 and a ROE of 8.7%. The company’s products include medical equipment, such as X-ray machines, ultrasound machines, and CT scanners. The company also manufactures and sells medical supplies, such as gloves, gowns, and masks.
Summary
Danaher Corporation, a global science and technology company, has recently seen its stock price drop following Credit Suisse’s downgrade of the company’s rating to ‘Neutral.’ This was likely due to inventory reductions and challenges in the diagnostics sector. Investors should be aware that while the company has seen positive media coverage in the past, there are a number of factors to consider before investing in Danaher.
Analysts suggest researching the company’s financials, conducting due diligence on its management, and looking at its competitive landscape. Those considering investing in Danaher should also take into account potential risks and rewards before making a decision.
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