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When Should You Buy Danaher Corporation (NYSE:DHR)?

Simply Wall St
·3 mins read

Today we're going to take a look at the well-established Danaher Corporation (NYSE:DHR). The company's stock received a lot of attention from a substantial price increase on the NYSE over the last few months. With many analysts covering the large-cap stock, we may expect any price-sensitive announcements have already been factored into the stock’s share price. But what if there is still an opportunity to buy? Let’s take a look at Danaher’s outlook and value based on the most recent financial data to see if the opportunity still exists.

Check out our latest analysis for Danaher

What's the opportunity in Danaher?

The stock seems fairly valued at the moment according to my valuation model. It’s trading around 11.90% above my intrinsic value, which means if you buy Danaher today, you’d be paying a relatively fair price for it. And if you believe that the stock is really worth $203.27, then there isn’t really any room for the share price grow beyond what it’s currently trading. What's more, Danaher’s share price may be more stable over time (relative to the market), as indicated by its low beta.

What does the future of Danaher look like?

earnings-and-revenue-growth
earnings-and-revenue-growth

Future outlook is an important aspect when you’re looking at buying a stock, especially if you are an investor looking for growth in your portfolio. Although value investors would argue that it’s the intrinsic value relative to the price that matter the most, a more compelling investment thesis would be high growth potential at a cheap price. Danaher's earnings over the next few years are expected to increase by 61%, indicating a highly optimistic future ahead. This should lead to more robust cash flows, feeding into a higher share value.

What this means for you:

Are you a shareholder? It seems like the market has already priced in DHR’s positive outlook, with shares trading around its fair value. However, there are also other important factors which we haven’t considered today, such as the track record of its management team. Have these factors changed since the last time you looked at the stock? Will you have enough conviction to buy should the price fluctuates below the true value?

Are you a potential investor? If you’ve been keeping tabs on DHR, now may not be the most optimal time to buy, given it is trading around its fair value. However, the optimistic prospect is encouraging for the company, which means it’s worth diving deeper into other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.

If you'd like to know more about Danaher as a business, it's important to be aware of any risks it's facing. Our analysis shows 2 warning signs for Danaher (1 doesn't sit too well with us!) and we strongly recommend you look at these before investing.

If you are no longer interested in Danaher, you can use our free platform to see our list of over 50 other stocks with a high growth potential.

This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com.