Pythia Cap
Equity Investing & Market Satire
Danaher is now probably fairly valued at a low-20s multiple, and that is worth owning as a portfolio diversifier given 10-12% EPS growth with long-term drivers not tied to the cycle or AI. Growth is framed as low double digits rather than teens because buyback timing and M&A have been underwhelming; @SouthernValue95 sees it as a low-teens grower. As with Thermo Fisher, numbers now look okay after the valuation reset, making it an okay long. x.com x.comÂ
Thermo Fisher is too expensive to own at 26x next-twelve-month EPS with earnings growing only 10%. That is a 2.6x PEG ratio, not as stretched as FICO or Intuitive Surgical at their highs, but still no chance worth owning. @mathlonning, in the thread being answered, calls the valuation unsustainable. x.comÂ
Danaher looks like a highly asymmetric buy after its selloff because it is likely to post revenue growth in 2027 and 2028. x.comÂ
Danaher's rebound looks like one to fade near $190 because bioprocessing, its bigger business, delivered disappointing sales and guidance. Weak trading in peers, with Repligen also lower, echoed that. A move from $165 to $190 in two days seems off; the initial flush may have been overdone, but it is hard to argue Danaher deserves to trade back at $200, where it entered earnings, after that bioprocessing commentary. x.comÂ
Johnson & Johnson's valuation does not make sense at a premium to Thermo Fisher and roughly flat to Danaher. @PythiaR, replying, calls J&J a clean story with limited patent-loss risk until the 2030s and a strong pipeline, but expensive at 22x, and prefers medtech such as Stryker. Pharma may simply have been easier to own than medtech given OBBB payer eligibility changes and hospital procedure volume risk, while life sciences has disappointed. x.comÂ
Iambic's R&D split and the basket's returns show why data-generating lab work matters more than compute in applied AI biotech. Iambic's S-1 puts about 8 cents of its 2025 R&D dollar into compute, 31 into discovery and the lab, and 28.5 into the clinic. After two months, the basket rose 20.5% versus -0.2% for the S&P 500 and -4.8% for biotech. Data-producing names rose 33.5%, or 16.8% without Moderna's readout day, versus 9% for bioprocess and reagents. The market bought the data. x.comÂ
The bioprocessing recovery and AI acceleration story for Danaher and Thermo Fisher is failing, as demand for their lab equipment turns out to be weaker than hoped. A real recovery looks more like a calendar 2027 event. x.com x.comÂ
Danaher's Masimo deal can create far more value than its high-single-digit Year 5 ROIC target suggests, because it pays a similar EBITDA multiple for a faster-compounding earnings stream. The target means about an 8% Year 5 unlevered FCF yield on the $9.9B entry EV. Counting cash generated and terminal value, with $125M cost and $50M revenue synergies, IRR could be about 22%, high teens even before synergies. The topline case is aggressive, but Danaher's DBS record supports the synergies. x.com … Show more
Bioprocessing suppliers gain a new demand tailwind as antibody drugs shift from IV to subcutaneous injectables, per @Borlaug_. SubQ could add 1-3% to bioprocess demand growth over 5-10 years, and one drug that added a subQ version in 2025 is on track to add 150bps to industry volume in 2027. Antibodies are 85%+ of bioprocess sales at Danaher, Thermo Fisher, Sartorius, Sartorius Stedim and Repligen, and their volume grows 6-7% a year, supporting a high-single-digit floor for consumables growth. … Show more
Danaher's AI-driven life-sciences expectations look excessive against its results. After a 44% rise since May on hopes AI would lift life sciences to unprecedented levels, it missed Q3 revenue and guided Q4 growth to just 4-5%. x.comÂ