Growth and opportunity
Thermo Fisher Scientific (TMO) has exhibited strong growth over the years. It operates in a market worth $100 billion, with annual growth in the range of 3%–5%. Thermo Fisher has a leading market position and is expected to grow at a faster pace than the market.
Short-term growth catalysts
Thermo Fisher Scientific is well positioned for long-term growth due to its leading market position and strong product portfolio. In the short term, as well, the company is poised to grow significantly, driven a few key growth catalysts, including the favorable NIH (National Institutes of Health) funding cycle in the United States.
The lucrative Chinese market also seems positive for Thermo Fisher, and the company expects this to impact growth significantly going forward because China is the company’s second-largest market. Strength in biopharma market is also estimated to drive the company’s revenues and profitability. The growing demand of biologics and vaccine development is creating short-term as well as long-term opportunities for the company.
Other medical device players are expected to witness revenue growth driven by these same trends. These peers include Becton Dickinson (BDX), Abbott Laboratories (ABT), and Agilent Technologies (A). Investors can consider investing in the iShares US Medical Devices ETF (IHI) for exposure to TMO and its peers.
In the next and final part, we’ll check in with how TMO’s PPI (practical process improvement) business system has been panning out for the company.