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Danaher (DHR) Shares Gain 11% in 3 Months: What's Driving It?

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Shares of Danaher Corporation DHR have gained notably in the past three months. A solid portfolio of products, healthy inorganic actions and strengthening demand seem to have boosted sentiments for the stock.

The Washington, DC-based company belongs to the Zacks Diversified Operations industry. The industry is in the top 28% (with a rank of 70) of more than 250 Zacks industries. Danaher has a $172.8-billion market capitalization and it currently carries a Zacks Rank #2 (Buy).

In the past three months, the company’s shares have gained 11% compared with the industry’s growth of 9%. Notably, the S&P 500 has risen 9.2% during the same period.

Zacks Investment Research
Zacks Investment Research

Image Source: Zacks Investment Research

Factors Influencing the Stock

In the past three months, Danaher delivered impressive results for the first quarter of 2021. Its earnings surpassed the Zacks Consensus Estimate by 50.9% and sales beat the same by 0.6%. The company anticipates sales, including the impact of Cytiva, to grow in the high-teen range in 2021 and the mid-20% in the second quarter.

A solid portfolio of products as well as a focus on innovation and an efficient workforce is expected to continue aiding Danaher in the quarters ahead. The pandemic has also been beneficial for the company, having boosted product demand by 20% year over year. Demand is expected to be strong for bioprocessing and non-bioprocessing products, molecular testing, and consumables. Notably, core sales are predicted to grow in low-double digits in the second quarter and high-single to low-double digits in 2021 due to the pandemic-induced demand.

Additionally, Danaher’s inorganic actions (including acquisitions and divestments) have been proving advantageous. Acquisitions and divestments had a net positive impact of 34.5% year over year on sales in the first quarter of 2021. Notably, Canada-based Vanrx Pharmasystems and Swift Biosciences were acquired by Danaher in the first quarter of 2021.

Currently, the Zacks Consensus Estimate for the company’s earnings is pegged at $8.91 for 2021 and $9.00 for 2022, marking an increase of 19.3% and 11.9% from the respective 60-day-ago figures. Also, the estimate for the second quarter improved from $1.76 to $2.04. Such an upward revision in earnings estimates is reflective of healthy operating conditions for the company.

Danaher Corporation Price and Consensus

Danaher Corporation Price and Consensus
Danaher Corporation Price and Consensus

Danaher Corporation price-consensus-chart | Danaher Corporation Quote

Other Stocks to Consider

Some other top-ranked stocks in the industry are Griffon Corporation GFF, Macquarie Infrastructure Company MIC and Crane Co. CR. While Griffon currently sports a Zacks Rank #1 (Strong Buy), both Macquarie and Crane carry a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

In the past 60 days, earnings estimates for these stocks have improved for the current year. Further, earnings surprise for the last reported quarter was 50.00% for Griffon, 25.00% for Macquarie and 26.72% for Crane.

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