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Investment Bank Lowers Thermo Fisher Price Target, Raises Estimates

NEW YORK (GenomeWeb News) – Investment bank Mizuho Securities has lowered its target price for Thermo Fisher Scientific's stock, but also has raised estimates for its revenues and earnings per share.

Analyst Peter Lawson said that he lowered his price target on the diversified scientific tools firm to $65 from $72 based on "contraction of both the market and group multiple." The target is based on 13.3x the investment firm's 2012 EPS estimate of $4.90, placing it in line with with Thermo Fisher's three-year historical average price-to-earnings multiple, said Lawson.

He raised his fiscal-year 2011 revenue estimate for Thermo Fisher to $11.85 billion from a previous estimate of $11.64 billion and his 2011 EPS estimate to $4.20 from $4.14. He also raised the FY2012 revenues estimate to $12.93 billion from $12.32 billion and the EPS estimate to $4.90 from $4.70.

Lawson said the 2012 estimate assumes organic growth of 4.5 percent, in line with 2011 and slightly above the 4 percent achieved in 2010.

He cited the acquisitions of Phadia and Dionex as the reasons for the raised estimates.

"We view both the Phadia and Dionex acquisitions favorably – two businesses that fit well, and generate significantly higher organic growth and margins, with synergies from Thermo's leading distribution and reach," Lawson wrote in the research note.

Mizuho has an Outperform rating on Thermo Fisher's stock.

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