Argus Maintains Buy On Danaher In Light Of Strong Quarter And Future Acquisition Potential


In a research report issued this morning, Argus analyst Jim Kelleher maintained coverage with a Buy rating on shares of Danaher Corp. (DHR), with a target price of $86, which represents a potential upside of 10% from where the stock is currently trading.

Kelleher noted, “We believe that the coming years will present a favorable environment for acquisitions, and expect Danaher to continue to streamline operations and boost margins at acquired companies. The recent dividend boost by the company is evidence that management is committed to providing value to shareholders. Danaher reported substantial growth rates in emerging markets, and retains strong core performance in the U.S. and Europe. Danaher is a cash-flow-generating machine. Despite a weak quarter in that regard, we expect year totals to be in line with historical precedents.

The analyst continued, “Danaher’s current free cash flow growth trajectory remains very strong; discounting projected future cash flows back at the calculated WACC of 9.2% provides an intrinsic value of $90 per share. Our comparables analysis, which compares traditional valuation metrics for DHR with those of diversified industrial peers, points to a value of $80. Blending these outputs, we arrive at a fair value of $86, approximately 8% above current levels on a total-return basis”.

According to TipRanks.com, which measures analysts and bloggers success rate based on how their calls perform, analyst Jim Kelleher currently has an average return of 18% and a 77% success rate. Kelleher is ranked #279 out of 3160 analysts.

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