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Thermo Fisher at a 52-Week High: What's Driving the Stock?

Share price of Thermo Fisher Scientific Inc. TMO, headquartered in Waltham, MA,  scaled a new 52-week high of $177.99 on Jul 7, eventually closing a slower at $177.49. The company has witnessed a consistent rally in its share price, gaining around 6.03% on better-than-expected results for the first quarter of 2017 on Apr 26. Along with the strong fundamentals, the raised full-year 2017 guidance bolstered investors’ confidence in the stock.

Average volume of shares traded in the last one year was remarkable at approximately 1,401.87K. The stock has a market cap of $69.44 billion.

Comparison with Broader Industry

For the majority of the last three months, the company’s share price has considerably outperformed the Zacks categorized Medical - Products sub-industry. The stock has rallied 16.1% during this period, outshining the sub-industry’s rise of 10.8%. The company has also outperformed the S&P 500’s 3.2% gain.

Taking the stable stock performance into consideration, we expect Thermo Fisher to scale higher in the coming quarters.

Estimate Revision Trend

This Zacks Rank #3 (Hold) company’s estimate revision trend for the current year is favorable. In the last 60 days, five estimates have moved up with no revision in the opposite direction. The magnitude of estimate revision increased around 0.65% to $9.22 per share. The company reported a four-quarter positive average earnings surprise of 2.3% and an earnings surprise of 2.97% in the last reported first quarter of 2017.

Growth Catalysts

Thermo Fisher’s continuous efforts to drive growth inorganically through acquisition activities have been generating a lot of enthusiasm among the investors. In this context, the company announced its agreement in May 2017 to acquire Netherlands- based Patheon N.V., a global provider of high-quality drug solutions to pharmaceutical and biopharma sectors.

Thermo Fisher expects to derive a lot of synergies through this buyout that will help expand its biopharma offerings in Europe. The combination is expected to strengthen Thermo Fisher’s foothold in the Pharmaceutical and Biotech markets by adding highly complementary services to its portfolio.

Also, the acquisition of FEI, which has already started generating synergies and contributing largely to the company’s analytical instruments portfolio, has boosted market optimism about the stock.

The market is also upbeat about the company’s focus to gain traction in the high-potential emerging geographies. In China, Thermo Fisher has been delivering solid results in markets like biopharma, healthcare and envirionment. In order to meet the rising demand for clinical trials in South Korea, the company recently launched a BioPharma services unit. Moreover, Thermo Fisher is continuously working to cash in on the opportunities in BioPharma, healthcare and food safety markets of India.

Zacks Rank & Key Picks

Thermo Fisher currently carries a Zacks Rank #3. A few better-ranked medical stocks are Inogen, Inc. INGN, Varian Medical Systems, Inc. VAR and Abbott Laboratories ABT. Notably, Inogen sports a Zacks Rank #1 (Strong Buy), while Varian Medical and Abbott Laboratories carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Inogen has a long-term expected earnings growth rate of 17.5%. The stock has gained around 23.5% in the last three months.

Varian Medical has a long-term expected earnings growth rate of 8%. The stock has rallied around 15.1% in the last three months.

Abbott Laboratories has an expected long-term adjusted earnings growth of 10.84%. The stock has added roughly 11.2% in the last three months.

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Abbott Laboratories (ABT): Free Stock Analysis Report
 
Thermo Fisher Scientific Inc (TMO): Free Stock Analysis Report
 
Varian Medical Systems, Inc. (VAR): Free Stock Analysis Report
 
Inogen, Inc (INGN): Free Stock Analysis Report
 
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