Analysts’ ratings

Of the 19 analysts covering Danaher (DHR), 15 (79%) had given the company “buy” ratings, four (21%) had given it “hold” ratings, and none had given it “sell” ratings as of January 12, 2017.

How Do Analysts Rate Danaher ahead of Its 4Q16 Results?

Danaher’s price target

Since the release of DHR’s 3Q16 results, one out of 19 analysts covering DHR has revised the stock’s rating to a “buy” from a “hold.” DHR’s consensus 12-month target price was $89.7 on January 12, 2017, indicating a ~10% return potential based on its closing price of $81.36 on January 13, 2017.

Consensus estimates

Analysts’ expect Danaher to report higher 4Q16 revenue figures both on a quarter-over-quarter basis and a year-over-year (or YoY) basis. In July 2016, Danaher spun off its industrial-focused Fortive and Industrial Technologies (SIJ) segments into an independent public company known as Fortive (FTV).

After this separation, Danaher became a diversified company with a principal focus on the healthcare (IHF) equipment industry. Therefore, it’s reasonable to compare DHR’s 4Q16 results with its financial data reflecting Fortive as a discontinued operation.

In 4Q15, DHR’s adjusted EPS (earning per share) after considering FTV’s separation came in at $0.91. For 4Q16, analysts anticipate DHR’s adjusted EPS to be ~$1.03.

Analysts also expect DHR’s peers 3M Company (MMM) and Varian Medical Systems (VAR) to report higher adjusted EPS on a YoY basis in their respective upcoming earnings results.

In the next few parts of this series, we’ll analyze analysts’ expectations for DHR and whether these recommendations are conservative or optimistic.

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