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TMO – Market expectations are for Uniform ROA to remain stable, but management may have concerns about demand, revenue growth, and their OmniPath ELISA test

December 11, 2020

  • Thermo Fisher Scientific Inc. (TMO:USA) currently trades near historical highs relative to UAFRS-based (Uniform) earnings, with a 23.1x Uniform P/E. At these levels, the market has expectations for profitability to remain stable, but management may have concerns about demand sustainability, their ability to maintain revenue growth, and the potential of their OmniPath ELISA test

  • Specifically, management may lack confidence in their ability to sustain
    coronavirus-related revenue growth, meet bioscience demand across the Asia-Pacific region, and maintain adjusted gross margins. Furthermore, they may have concerns about the potential of their OmniPath ELISA test and their single use bioproduction technologies, as well as the sustainability of their PCR testing demand. Management may also have concerns about FX headwinds and rising interest expenses