Jonah Lupton
CEO & CIO of FirstWave Capital, Long-Biased Growth
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
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
Danaher is a cleaner way than Thermo Fisher to play an aging population. Its greater bioprocessing exposure ties it more directly to drug cost of goods. x.comÂ
Thermo Fisher trading back at roughly Liberation Day multiples doesn't make much sense. Its guide was only 'down' against expectations that had grown too high at 25x earlier this year, after the stock re-rated once Liberation Day fears proved too pessimistic about the actual tariff, NIH and pharma-pricing impact. The other explanation is that an inflation shock is bad for long-duration assets. x.comÂ
Biotech tools stocks such as Charles River and Illumina are in a narrative-driven mania while their fundamentals haven't really moved. Charles River is ripping after reaffirming guidance for negative revenue growth this year. Illumina hasn't grown in five years, yet trades at over 50x earnings and 35x EV/EBITDA, with merely fine margins. Five straight years of easier comparisons are being sold as a coiled spring. x.com x.com x.comÂ
Lam Research's valuation is scary, at 73 times earnings, a PEG ratio of 2.16 and 82 times free cash flow. x.comÂ
High-quality healthcare companies such as Thermo Fisher, Boston Scientific, Novo Nordisk and Abbott now trade at washed-out multiples, which may make the space one of the cheapest pockets of the market on a quality-adjusted basis while SaaS draws the attention. x.comÂ
Eli Lilly looks expensive at 26x forward earnings when drugmakers usually get 20x. Fair value is about $820.69-$1,045, or 20x next year's $46.63 EPS give or take 12%, so the $1,215 price sits 16% above the top of that range. The valuation also leans on forecasts, with forward earnings 55% above trailing. This is a valuation-level read only, not fundamental work. x.comÂ
ASML is not undervalued at its current valuation of about 46.4 times earnings with a PEG ratio of nearly 3. x.comÂ
Costco, Apple, Intuitive Surgical, Alphabet and MSCI are amazing companies priced too high for their growth. Costco trades at 46x earnings on high-single-digit growth, Apple at 32x forward on low-double-digit EPS growth, and Intuitive Surgical at 38x forward on low-teens growth. Alphabet, the most attractive, is 33x operating income excluding investment gains. MSCI is 34x trailing on low-double-digit growth; S&P Global is better, cheaper and extremely high quality with similar growth. x.com … Show more
Intuitive Surgical is worth 30 times earnings at most, below where it trades. Judged purely on its financials, without knowing what the company does, even 30 times would be too high. x.comÂ
