Broken Moats
Family-Office Long/Short Research, Variant Perception
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
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
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 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
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
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
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
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
