Danaher Corporation DHR has failed to impress investors with its recent operational performance due to weakness across its businesses and high operational expenses.

Based in Washington, DC, Danaher is engaged in designing, manufacturing and marketing medical, research and industrial products and services throughout the world.

Let’s discuss the factors that continue taking a toll on the firm.

Factors Affecting DHR Stock

Business Weakness: Despite recovery, sluggish demand across the pharma and biotech markets in China has been weighing on Danaher’s Instrument businesses under the Life Sciences segment. The company has been witnessing a sales decline in mass spectrometry, flow cytometry & lab automation solutions and microscopy businesses due to soft demand for equipment in major end-markets. Core revenues from the Life Sciences segment declined 2% on a year-over-year basis in 2024. Softness in the genomics consumables business, owing to tepid sales in the gene reading and proteins product lines, remains concerning for the segment.

Also, weakness in the Biotechnology segment raises concerns for the company. Sluggish demand in the discovery and medical business has been weighing on the performance of the Biotechnology segment. The segment’s core revenues declined 4.5% on a year-over-year basis in 2024. Despite improvement, equipment demand remained subdued as customers remained cautious with their capital spending.

For the first quarter of 2025, Danaher expects its adjusted core sales from continuing operations to decline in low-single digits on a year-over-year basis.

Rising Costs & Expenses: The company’s selling, general and administrative (SG&A) expenses increased 5.9% year over year in 2024 due to the impact of the Abcam acquisition. The metric, as a percentage of net sales, increased 180 basis points to 32.5% in the year. Escalating expenses if not controlled are likely to hurt the company’s bottom line in the quarters ahead.

High Debt Levels: Danaher exited fourth-quarter 2024 with a long-term debt of $15.5 billion. Its current liabilities were $6.8 billion, higher than the cash equivalents of $2.1 billion. Also, interest expenses in 2024 remained high at $278 million. High debt levels can increase its financial obligations and prove detrimental to profitability in the quarters ahead.

DHR Stock’s Price Performance

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Over the past six months, the Zacks Rank #4 (Sell) company’s shares have plunged 24.7% compared with the industry’s 15% decline.

Estimate Revisions: In the past 60 days, the Zacks Consensus Estimate for Danaher’s 2025 earnings has trended down from $8.31 per share to $7.63 on 12 downward estimate revisions against none upward. The consensus estimate for 2026 earnings decreased from $9.19 per share to $8.57 on seven downward estimate revisions against none upward.

Key Picks

Some better-ranked stocks from the same space are discussed below:

Pediatrix Medical Group, Inc. MD presently sports a Zacks Rank # 1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

The company delivered a trailing four-quarter average earnings surprise of 19.4%. In the past 60 days, the Zacks Consensus Estimate for MD’s 2025 earnings has increased 4.8%.

Cencora, Inc. COR currently carries a Zacks Rank #2 (Buy). COR delivered a trailing four-quarter average earnings surprise of 5%.

In the past 60 days, the consensus estimate for Cencora’s fiscal 2025 (ending September 2025) earnings has increased 2.5%.

Enhabit, Inc. EHAB presently carries a Zacks Rank of 2. The company delivered a trailing four-quarter average earnings surprise of 2.9%.

In the past 60 days, the Zacks Consensus Estimate for EHAB’s 2025 earnings has increased 25%.

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Danaher Corporation (DHR) : Free Stock Analysis Report

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This article originally published on Zacks Investment Research (zacks.com).

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