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Cantor Fitzgerald Initiates Coverage on Thermo Fisher Scientific at Overweight

NEW YORK (GenomeWeb) – Cantor Fitzgerald yesterday initiated coverage of Thermo Fisher Scientific with a rating of Overweight and a price target of $194 per share.

In a note to investors, Cantor analyst Bryan Brokmeier said that as the largest company in the highly-fragmented life science tools and diagnostics sector, Thermo Fisher has "significant opportunity for organic growth at the expense of weaker competitors," adding that the company is "well-positioned to benefit from positive secular trends, as well as capture share given its position in attractive end markets."

Brokmeier also noted that Thermo Fisher's largest end market, the biopharma industry, is growing at a mid- to high-single-digit rate and that the company's recent acquisition of pharma services firm Patheon should strengthen its offerings in this area.

He further cited the ongoing move of mass spectrometry into the clinic as a potential driver of growth for the company. During its analyst meeting this week, Thermo Fisher revealed plans to launch an automated mass spec-based clinical analyzer next year.

Thermo Fisher "is one of the best positioned companies to drive clinical mass spec adoption given their commercial reach and experience bringing clinical solutions to market," Brokmeier wrote.

Cantor's note also highlighted Thermo Fisher's efforts to drive operating margins from the 22.5 percent posted in 2016 to between 25 percent and 26 percent in 2020. The target price is based the company trading at 19 times Cantor's 2018 adjusted cash earnings per share estimate.

Thermo Fisher's shares were essentially flat at $171.78 during Friday morning trading on the New York Stock Exchange.