Thermo Fisher Scientific posted better-than-expected earnings on Monday, largely driven by its success in supporting its customers responses to the COVID-19 pandemic.
Fourth quarter revenues grew 54% to $10.55 billion, beating analysts’ expectations of $9.54 billion, while EPS increased by 100% to $7.09, compared to forecasts of $6.52.
Full year revenues came in at $32.22 billion, representing growth of 26%. Average analyst revenue estimates were $31.12 billion. Full Year adjusted EPS increased 58% to $19.55, surpassing analysts’ expectations of $18.97.
Thermo (TMO) generated $3.2 billion in the fourth quarter from COVID-19 response revenue and established itself as a leader in COVID-19 testing.
“Our team executed extremely well and operated with speed at scale to help our customers and governments around the world respond to the pandemic and continue to advance their important work,” said Marc Casper, Chairman, President and CEO of Thermo Fisher Scientific.
“I am proud that we delivered the strongest year of performance in our company’s history. From a financial perspective, we generated exceptional growth in revenue, earnings and free cash flow for the quarter and the year,” Casper added. (See Thermo Fisher stock analysis on TipRanks)
Credit Suisse analyst Erin Wright reiterated her Buy rating on TMO three weeks ago and set her price target at $580. This implies upside potential of around 13% from current levels.
Wright acknowledged Thermo’s ability to evolve with the market and credited the company with exceeding market expectations. “Its impressive performance and resulting robust cash flow generation has enabled it to incrementally invest across its platform, enhancing its competitive positioning and contributing to our building conviction,” she explained.
Thermo receives a Moderate Buy consensus rating based on 5 Buys and 2 Holds. The average analyst price target of $537.57 suggests upside potential of around 5% over the next 12 months.
Thermo scores a Market Neutral 7 out of 10 on TipRanks’ Smart Score, which indicates that TMO shares are expected to perform in line with market expectations.
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