TMO - Embedded Expectations Analysis - 2020 09 09
Thermo Fisher Scientific Inc. (TMO:USA) currently trades at a historical high relative to UAFRS-based (Uniform) earnings, with a 24.9x Uniform P/E. At these levels, the market has expectations for profitability to remain stable, but management may have concerns about growth, vaccine pricing, and coronavirus headwindsSpecifically, management may be exaggerating their manufacturing scalability amidst coronavirus disruptions, their position in coronavirus testing, and their performance as a team. They may also lack confidence in their ability to meet Q3 outlook, reduce costs, and sustain adjusted ROIC growth. Furthermore, they may have concerns about differing vaccine prices from pharmaceutical companies and their ability to efficiently deploy capital and complete construction of the state-of-the-art biologics facility in Switzerland by mid-2021. Additionally, they may be concerned about their ability to sustain growth in operating income and about their current leverage ratios. Finally, management may lack confidence in their ability to navigate challenges through these unprecedented times and continue improving their performance through their PPI Business System, and they may have concerns about the regulatory process of their tender offering
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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