Danaher (NYSE:DHR) just took a hit, dropping by 8.6% in the morning, the steepest fall since April 2023. Investors weren't thrilled after the company posted Q4 earnings per share of $2.14, missing Wall Street's $2.16 estimate. Revenue came in at $6.5 billion, slightly ahead of projections, but weak margins and cautious guidance sent the stock sliding. The company expects a low-single digits revenue decline in Q1, implying $5.6 billionbelow analysts' $5.9 billion forecast. While full-year sales are set to rise 3%, investors are questioning whether Danaher can make up for lost ground.
CEO Rainer M. Blair remains optimistic, highlighting strong order trends in bioprocessing and market share gains in molecular diagnostics. But the numbers tell a different storyQ1 2024 revenue was already down 2.5% year-over-year, with core revenue slipping 4%. Looking ahead, management expects Q2 core revenue to drop mid-single digits, with full-year revenue shrinking in the low-single digits. The market, used to Danaher outperforming, isn't reacting well to this softer outlook.
Danaher isn't cheapit trades at 31 times expected 2025 earnings, well above the S&P 500's 22x multiple. Investors expect flawless execution, and the company has historically beaten estimates by nearly 10%. Citi analyst Patrick Donnelly is still bullish with a $285 target but flagged weaker-than-expected growth and margins. With 83% of analysts rating the stock a Buy, confidence is still therebut if Danaher can't turn guidance into growth, investors might start looking elsewhere.
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