KeyBanc Capital Markets analyst Paul Knight downgraded Thermo Fisher Scientific Inc (NYSE:TMO) to Sector Weight from Overweight.
Yesterday, TMO posted Q3 revenue of $10.574 billion, down 1% Y/Y, missing the consensus of $10.595 billion. Adjusted EPS of $5.69 beat the consensus of $5.61.
Given the current macroeconomic environment, the company lowered the outlook for FY23 revenue to $42.7 billion (prior $43.4 billion – $44.0 billion) vs. $43.53 billion consensus and adjusted EPS to $21.50 (prior $22.28 – $22.72) vs. $22.31 consensus.
The analyst notes management’s concern about broad-based cash conservatism from biotech customers, incremental weakness in China, possible destocking, and overall industry decline.
The analyst reduced estimates for revenue and EPS to $42.70 billion (from $43.65 billion earlier, vs. consensus $43.359 billion) and $21.50 (from $22.33 earlier) for FY23.
Knight cut the estimates for revenue to $42.70 billion (from $47.35 billion vs. consensus $45.043 billion) and EPS to $21.75 from $24.55 for FY24.
The analyst doesn’t see near-term visibility with significant COVID headwinds expected to continue through FY24, weak funding environment for emerging biotechs, cash conservatism from large pharma customers, and a slowdown in China pharma markets.
Also, Morgan Stanley lowered the price target to $545 from $600 and maintained an Overweight rating.
Raymond James analyst cut the price target to $515 from $580 and reiterated the rating at Outperform.
Citigroup reduced the price target to $530 from $625 and kept the Buy rating.
Price Action: TMO shares are trading higher by 2.02% at $441.79 on the last check Thursday.
