November 21, 2018

TMO – Market expectations are for declining Uniform ROA, and management has concerns about their revenue guidance, services growth, and 2019 outlook


  • Thermo Fisher Scientific Inc. (TMO:USA)currently trades near historical highs relative to UAFRS-based (Uniform) Earnings, with a 20.1x Uniform P/E. However, even at these levels, the market has bearish expectations for the firm, and management has concerns about revenue guidance, service line and pharma services growth, and their outlook for FY 2019
  • Specifically, management may have concerns about their ability to meet revenue guidance, and to sustain growth in their pharma services business. Also, they may be exaggerating their excitement about their outlook for FY 2019, particularly their ability to capitalize on their improved cash balance. Moreover, they may be exaggerating the versatility of Phadia 200’s test applications, and the widespread accessibility of their Phenom Pharos product. In addition, they may lack confidence in their ability to leverage their value proposition, and to drive synergies with their new Advanced Bioprocessing Business. Furthermore, they may lack confidence in their ability to sustain service line growth
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