At US$238, Is It Time To Put Danaher Corporation (NYSE:DHR) On Your Watch List?

Today we're going to take a look at the well-established Danaher Corporation (NYSE:DHR). The company's stock received a lot of attention from a substantial price movement on the NYSE over the last few months, increasing to US$256 at one point, and dropping to the lows of US$225. Some share price movements can give investors a better opportunity to enter into the stock, and potentially buy at a lower price. A question to answer is whether Danaher's current trading price of US$238 reflective of the actual value of the large-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at Danaher’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.

See our latest analysis for Danaher

What's The Opportunity In Danaher?

According to my valuation model, Danaher seems to be fairly priced at around 15.23% above my intrinsic value, which means if you buy Danaher today, you’d be paying a relatively fair price for it. And if you believe the company’s true value is $206.94, then there isn’t really any room for the share price grow beyond what it’s currently trading. Furthermore, Danaher’s low beta implies that the stock is less volatile than the wider market.

Can we expect growth from Danaher?

Future outlook is an important aspect when you’re looking at buying a stock, especially if you are an investor looking for growth in your portfolio. Although value investors would argue that it’s the intrinsic value relative to the price that matter the most, a more compelling investment thesis would be high growth potential at a cheap price. With profit expected to grow by a double-digit 11% over the next couple of years, the outlook is positive for Danaher. It looks like higher cash flow is on the cards for the stock, which should feed into a higher share valuation.

What This Means For You

Are you a shareholder? It seems like the market has already priced in DHR’s positive outlook, with shares trading around its fair value. However, there are also other important factors which we haven’t considered today, such as the financial strength of the company. Have these factors changed since the last time you looked at the stock? Will you have enough confidence to invest in the company should the price drop below its fair value?

Are you a potential investor? If you’ve been keeping tabs on DHR, now may not be the most advantageous time to buy, given it is trading around its fair value. However, the optimistic prospect is encouraging for the company, which means it’s worth further examining other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.

With this in mind, we wouldn't consider investing in a stock unless we had a thorough understanding of the risks. For example, we've discovered 1 warning sign that you should run your eye over to get a better picture of Danaher.

If you are no longer interested in Danaher, you can use our free platform to see our list of over 50 other stocks with a high growth potential.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.