Now trading at a price of $217.73, Danaher has moved -0.5% so far today.
Danaher returned losses of -19.0% last year, with its stock price reaching a high of $249.59 and a low of $182.09. Over the same period, the stock underperformed the S&P 500 index by -37.0%. As of April 2023, the company's 50-day average price was $208.66. Danaher Corporation designs, manufactures, and markets professional, medical, industrial, and commercial products and services worldwide. Based in Washington, DC, the large-cap Industrials company has 79,000 full time employees. Danaher has offered a 0.5% dividend yield over the last 12 months.
Growing Revenues With Increasing Reinvestment in the Business:
| 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | |
|---|---|---|---|---|---|---|
| Revenue (MM) | $19,893 | $17,911 | $22,284 | $29,453 | $31,471 | $29,566 |
| Revenue Growth | n/a | -9.96% | 24.42% | 32.17% | 6.85% | -6.05% |
| Gross Margins | 62% | 56% | 56% | 61% | 60% | 59% |
| Operating Margins | 15% | 18% | 20% | 26% | 28% | 24% |
| Net Margins | 13% | 17% | 16% | 22% | 23% | 24% |
| Net Income (MM) | $2,653 | $3,008 | $3,646 | $6,433 | $7,209 | $7,209 |
| Net Interest Expense (MM) | $137 | $108 | $494 | $456 | $211 | $272 |
| Depreciation & Amort. (MM) | $562 | $564 | $1,138 | $1,450 | $1,484 | $1,511 |
| Earnings Per Share | $3.74 | $4.05 | $4.89 | $8.61 | $9.66 | $7.939999999999999 |
| EPS Growth | n/a | 8.29% | 20.74% | 76.07% | 12.2% | -17.81% |
| Diluted Shares (MM) | 710 | 726 | 719 | 737 | 737 | 754 |
| Free Cash Flow (MM) | $3,438 | $3,316 | $5,424 | $7,064 | $7,367 | $7,209 |
| Capital Expenditures (MM) | $584 | $636 | $791 | $1,294 | $1,152 | $1,310 |
| Current Ratio | 1.47 | 5.19 | 1.86 | 1.43 | 1.89 | 2.26 |
| Long Term Debt (MM) | $9,688 | $21,517 | $21,193 | $22,168 | $19,086 | $19,513 |
| Net Debt / EBITDA | 2.48 | 0.47 | 2.69 | 2.17 | 1.35 | 1.12 |
Danaher has growing revenues and increasing reinvestment in the business, wider gross margins than its peer group, and decent operating margins with a positive growth rate. The company also benefits from a strong EPS growth trend, generally positive cash flows, and healthy leverage.
A Lower P/B Ratio Than Its Sector Average but Trades Above Its Graham Number:
Danaher has a trailing twelve month P/E ratio of 26.3, compared to an average of 22.19 for the Industrials sector. Based on its EPS guidance of $7.85, the company has a forward P/E ratio of 26.6. Danaher's PEG ratio is 2.83 on the basis of the 9.3% weighted average of the company and the broader market's EPS compound average growth rates. This suggests that the company's shares are overvalued. In contrast, the market is likely undervaluing Danaher in terms of its equity because its P/B ratio is 3.07 while the sector average is 4.06. The company's shares are currently trading 94.3% above their Graham number. In conclusion, Danaher's impressive cash flow trend, decent P/B ratio, and reasonable use of leverage demonstrate that the company may still be fairly valued — despite its elevated earnings multiple.
Analysts Give Danaher an Average Rating of Buy:
The 20 analysts following Danaher have set target prices ranging from $200.0 to $280.0 per share, for an average of $236.25 with a buy rating. As of April 2023, the company is trading -11.7% away from its average target price, indicating that there is an analyst consensus of some upside potential.
Danaher has a very low short interest because 0.9% of the company's shares are sold short. Institutions own 79.3% of the company's shares, and the insider ownership rate stands at 10.76%, suggesting a large amount of insider shareholders. The largest shareholder is Vanguard Group Inc, whose 8% stake in the company is worth $12,178,972,910.
