Should You Continue to Hold Thermo Fisher Stock in Your Portfolio?

Core Insights - Thermo Fisher Scientific Inc. is focused on sustainable long-term growth through strategic collaborations and strong performance in end markets, although macroeconomic challenges and competitive pressures pose risks to its operations [1][9]. Financial Performance - Over the past year, Thermo Fisher's stock has declined by 20.2%, underperforming the industry decline of 15.3% and contrasting with the S&P 500's gain of 16.6% [2]. - The company has a market capitalization of $158.1 billion and an earnings yield of 4.6%, significantly higher than the industry's -4.7% [2]. - Thermo Fisher has consistently surpassed earnings estimates in the last four quarters, achieving an average surprise of 1.8% [2]. Business Strengths - The company has expanded its biosciences and bioproduction capacities to meet global vaccine manufacturing demands, particularly in the pharma and biotech sectors [4]. - Recent strategic partnerships include the acquisition of a sterile manufacturing site from Sanofi and collaboration with the Chan Zuckerberg Institute to enhance biological imaging technologies [5][6]. Challenges - Macroeconomic factors, including geopolitical tensions and supply chain disruptions, are creating a challenging business environment for Thermo Fisher [7][10]. - Rising selling, general, and administrative (SG&A) expenses, which increased by 5.4%, have pressured the company's operating margins, leading to a contraction of 124 basis points in the second quarter [10]. - The competitive landscape is tough, with various manufacturers and distributors posing challenges due to evolving technology and customer demands [11]. Future Outlook - The Zacks Consensus Estimate for Thermo Fisher's earnings per share (EPS) has increased by 3 cents to $22.52, with projected revenues for 2025 at $43.90 billion, indicating a 2.4% rise from the previous year [12].