On Apr 12, we issued an updated research report on Thermo Fisher Scientific, Inc. TMO. The company is rapidly boosting its inorganic growth profile. The most recent takeover was that of Brammer Bio. Its strong focus on the emerging markets is also encouraging. The stock has a Zacks Rank #3 (Hold).
Thermo Fisher has outperformed its industry in the past six months. The stock has gained 8.6% compared with the industry’s 5% rise.
In fourth-quarter 2020, the company delivered an outstanding quarterly performance with organic growth of 51%, leveraging on its capacity to extend support amid the pandemic. COVID-19 response revenues increased to $3.2 billion in the fourth quarter, bringing the full-year contribution to $6.6 billion driven by testing-related products and instruments.
The base business too grew 5% organically, registering another quarter of sequential improvement. Further, for 2020, the company generated $500 million of revenues from COVID-19-related vaccines and therapies support.
In terms of end market, pharma and biotech registered 25% growth in the fourth quarter on robust performance in bioproduction, pharma services, biosciences, and research and safety market channel businesses. In diagnostics and healthcare, the company experienced exceptionally high demand for COVID-19 testing and was able to deliver 200% growth.
Academic and government grew in high single digits as customers across the globe ramped up activity. The company saw particularly good growth across its chromatography and mass spectrometry businesses. In industrial and applied end market, following a series of dull quarters, the company returned to growth in the fourth quarter and grew in low single digits.
On the flip side, the COVID-19 headwinds impacted each of its end markets in varying degrees. Overall, the company saw significantly reduced customer activity due to work disruptions.
Thermo Fisher’s industrial and applied end market registered low single-digit growth in the fourth quarter. Customers in this end market were significantly affected by business disruptions due to the pandemic.
Foreign currency fluctuations and competitive landscape are the other major downsides.
Key Picks
Some better-ranked stocks from the broader medical space are Owens & Minor, Inc. OMI, BioRad Laboratories, Inc. BIO and LeMaitre Vascular, Inc. LMAT. While Owens & Minor sports a Zacks Rank #1 (Strong Buy), BioRad Laboratories and LeMaitre Vascular carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Owens & Minor has a projected long-term earnings growth rate of 15%.
BioRad Laboratories has a projected long-term earnings growth rate of 7%.
LeMaitre Vascular has an estimated long-term earnings growth rate of 10%.
5 Stocks Set to Double
Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
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Owens & Minor, Inc. (OMI): Free Stock Analysis Report
Thermo Fisher Scientific Inc. (TMO): Free Stock Analysis Report
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LeMaitre Vascular, Inc. (LMAT): Free Stock Analysis Report
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