Danaher Life Sciences has certainly not been an easy stock to own this year. A wave of startups going public on Wall Street would go a long way toward changing that. Year-to-date performance: Down 0.1% Forward price-to-earnings multiple: 27.8 vs. five-year average of 28.8 Our rating: Equivalent to Buy 1 Our target price: $305 per share DHR Year-to-date Danaher Mountain stock performance. A Look Back to 2024 This year has been all about the recovery in the bioprocessing market, which has been under pressure due to rising inventories at large customers and limited financing for small biotech startups purchasing Danaher equipment and products. Another issue raised by Danaher was China, where economic growth struggled throughout the year and announced stimulus measures failed to translate into a meaningful rise in orders. That's really what made this a frustrating year to invest in Danaher. Management performed well and did its best to keep expectations for bioprocessing orders in check with investors, and then once that business started to turn around and the stock got some momentum, investors refocused their attention on the negative economic updates from China. Through it all, we have maintained Danaher as one of 12 core properties in our portfolio. Why? Jim Cramer's Investing Rule #20: Patience is a virtue and compromising on value is a sin. While Danaher may trade at a premium to the S&P 500, we see significant value in this stock given the long-term end-market appeal of life sciences, including bioprocessing, and the quality of its management team, which is always looking for new ways to unwind companies with Slower growth and updating the portfolio with growth over many years in mind. '25 Looking to the Future In addition to the ongoing recovery in bioprocessing, Danaher needs the Chinese economy to regain strength, which should lead to increased orders from customers in the country. Within bioprocessing, large pharmaceutical customers are part of the business equation. With its inventory levels largely controlled, new orders should start to accelerate. The other part of the equation is smaller startups, which saw their access to financing take a big hit after the collapse of Silicon Valley Bank in March 2023. While lower interest rates could certainly lead to more financing in the private market, they should also improve Investment background. Initial public offerings. The improving IPO market is really good news for Danaher, as Jim explained during the December monthly meeting. “One of the first things biotech companies do when they go public is place big orders with Danaher… That means to me that 2025 is going to be a lot better than 2024, even if China doesn't improve,” Jim said. Make no mistake: China's growth is clearly desirable and our preferred outcome. But we also recognize that the sluggish performance this year at least serves to make year-over-year comparisons with China easier in 2025. As a result, this may shift some focus away from the distressed area as investors put asterisks on Danaher's numbers there, understanding that It is simply beyond management's control but must eventually improve. (Jim Cramer's Charitable Trust is long DHR. See here for a full list of stocks.) As a subscriber to the CNBC Investing Club with Jim Cramer, you'll receive a trade alert before Jim takes a trade. Jim waits 45 minutes after a trade alert is sent before buying or selling a stock in his charitable fund's portfolio. If Jim talks about a stock on CNBC TV, he waits 72 hours after the trade alert is issued before executing the trade. The above Investment Club information is subject to our Terms and Conditions and Privacy Policy, as well as our Disclaimer. No obligation or fiduciary duty exists or is created by your receipt of any information provided in connection with the Investment Club. No specific results or profits are guaranteed.
A worker uses a machine made by Pall Corp. During a demonstration of the influenza vaccine production phase during a tour of the Sanofi Pasteur vaccine production facility in Swiftwater, Pennsylvania.
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Life sciences company Danaher It certainly hasn't been easy owning a stock this year. A wave of startups going public on Wall Street would go a long way toward changing that.
