TMO - Embedded Expectations Analysis - 2019 05 20
Thermo Fisher Scientific Inc. (TMO:USA) currently trades near historical highs relative to UAFRS-based (Uniform) Earnings, with a 20.7x Uniform P/E. However, even at these levels, the market has bearish expectations for the firm, and management has concerns about their international growth, product capabilities, and capacity investments.Specifically, management may lack confidence in their ability to sustain growth in China, Europe, Asia Pacific, and non-North America rest of the world, particularly in their industrial and applied business. In addition, they may lack confidence in their ability to sustain strong productivity and volume leverage in their Laboratory Products and Services segment, and sustain growth in their Specialty Diagnostics segment. Moreover, they may be exaggerating the capabilities of Brammer Bio and the strength of their Pharma and Biotech businesses. Finally, they may be concerned about the progress of their capacity investments in Italy and North Carolina, the feed safety capabilities of the TSQ 9000 GC mass spec system, and the potential of the Helios 5 DualBeam.
Thermo Fisher Scientific is engaged in serving science. The company's segments include: Life Sciences Solutions, which provides reagents, instruments and consumables used in biological and medical research, discovery and production of new drugs and vaccines as well as diagnosis of disease; Analytical Instruments, which provides instruments, consumables, software and services that are used for a range of applications in the laboratory, on the production line and in the field; and Specialty Diagnostics, which provides diagnostic test kits, reagents, culture media, instruments and associated products for customers in healthcare, clinical, pharmaceutical, industrial, and food safety laboratories.
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- GAAP and IFRS have failed to provide rules for reliable financial statement reporting
- Stock analyst recommendations are not grounded in disciplined financial analysis
- Credit agencies have been set up to grossly fail in their responsibilities to investors and the public markets
- Utter lack of willingness of major research firms to employ the the most advanced forensic analysis available
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- The governing accounting bodies have created more leeway for mis-estimates and mis-classifications as financials have become unwieldy and overwhelming
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