Danaher (DHR): Assessing Valuation After Recent Share Price Rebound

Danaher (NYSE:DHR) has been on the radar for many investors lately, thanks to a sharp shift in the company’s share price in the past month. The life sciences and diagnostics giant has climbed 12% since early May, even as the broader market has moved sideways. This movement could catch investors’ attention and prompt questions about what, if anything, has changed for the business beyond the numbers on the screen.

Looking at the past year, Danaher’s stock has been under pressure, dropping 22%. However, short-term momentum has turned positive with double-digit growth over the past month, which marks a notable reversal from its sluggish start to 2024. The company’s annual revenue and net income growth rates remain in positive territory, suggesting operational stability despite market skepticism. Recent updates have focused mostly on the company's strategy in core markets, with no single headline event driving the rebound.

With this bounce in the share price, investors might be wondering if Danaher is finally turning a corner and trading at a discount, or if the market is already pricing in the company’s next wave of growth.

Most Popular Narrative: 14% Undervalued

According to community narrative, Danaher is considered undervalued based on its future earnings potential and current share price discount. Analysts see significant upside that could attract attention from growth-focused investors.

The sustained advancement of precision medicine and personalized therapies, including new AI-assisted diagnostic solutions and groundbreaking launches in genomics (such as support for in vivo CRISPR therapies), positions Danaher's technology portfolio to capture higher-margin growth and drive long-term EBITDA expansion.

Looking for the key factor fueling Danaher's bullish valuation outlook? Learn about the transformation driving the company's high-margin profile. The fair value projection is based on significant progress in revenue, profit, and operational efficiency. What needs to happen for Danaher to close this valuation gap? Explore the essential financial milestones that could define its next phase.

Result: Fair Value of $245.95 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, persistent trade tensions and regulatory shifts in China could quickly derail Danaher’s growth outlook, which may put both revenue and margins at risk.

Find out about the key risks to this Danaher narrative.

Another View: What About the DCF?

Looking beyond earnings multiples, our DCF model tells a similar story. It finds Danaher to be undervalued when future cash flows are projected. Do both methods point to true value, or is there more beneath the surface?

Look into how the SWS DCF model arrives at its fair value.

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Danaher for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover undervalued stocks based on their cash flows. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Build Your Own Danaher Narrative

If our take does not align with your perspective, or you would rather dive into the numbers yourself, you can easily build your own view in just a few minutes and do it your way.

A good starting point is our analysis highlighting 2 key rewards investors are optimistic about regarding Danaher.

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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.

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