Thermo Fisher Scientific Inc. (NYSE:TMO) appears to be undervalued by approximately 24%, based on a two-stage growth model and discounted cash flow (DCF) model that estimates its intrinsic value at $597 per share, according to an analysis published Today. The current share price of the company stands at $454, indicating a significant gap between the market price and the estimated intrinsic value.
The financial models used in the analysis project ten-year cash flows, accounting for both growing and shrinking free cash flow situations. They consider an initial high growth phase and a later stable growth phase. This discrepancy between the current share price and the estimated intrinsic value is larger than the analyst price target of $529.
This assessment suggests there could be potential for investors in Thermo Fisher Scientific, given the disparity between its market price and estimated intrinsic value. However, it's important for investors to conduct their own due diligence as market conditions and company performance can change rapidly.
InvestingPro Insights
In addition to the potential undervaluation highlighted in the article, InvestingPro data and tips further underscore Thermo Fisher Scientific Inc.'s (NYSE:TMO) investment potential.
InvestingPro data shows that TMO's management has been proactively buying back shares, a move that often indicates confidence in the company's future performance. This is complemented by a strong earnings record that has allowed the company to continue dividend payments, even raising its dividend for 5 consecutive years. This is a clear sign of the company's commitment to returning value to its shareholders.
However, it's worth noting that there's been a declining trend in earnings per share, and 18 analysts have revised their earnings predictions downwards for the upcoming period. This suggests potential headwinds in the short-term, but the company's longstanding position as a prominent player in the Life Sciences Tools & Services industry, coupled with high returns on book equity, indicate a resilient business model.
InvestingPro tips also highlight that TMO's stock generally trades with low price volatility, providing a degree of stability for investors. The company has also been profitable over the last twelve months, and analysts predict it will continue to be profitable this year.
These are just a few of the insights available on InvestingPro, which offers an extensive array of data and tips for numerous companies. For a deeper dive into TMO and other investment opportunities, consider exploring InvestingPro's comprehensive suite of resources.
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