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Thermo Fisher Scientific (TMO) Gains But Lags Market: What You Should Know

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In the latest trading session, Thermo Fisher Scientific (TMO) closed at $538.65, marking a +0.33% move from the previous day. The stock lagged the S&P 500's daily gain of 0.59%. Meanwhile, the Dow gained 0.15%, and the Nasdaq, a tech-heavy index, added 0.07%.

Coming into today, shares of the maker of scientific instrument and laboratory supplies had gained 4.54% in the past month. In that same time, the Medical sector gained 8.26%, while the S&P 500 gained 7.25%.

Thermo Fisher Scientific will be looking to display strength as it nears its next earnings release, which is expected to be July 28, 2022. The company is expected to report EPS of $4.91, down 12.32% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $9.84 billion, up 6.07% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $22.70 per share and revenue of $42.46 billion. These totals would mark changes of -9.67% and +8.27%, respectively, from last year.

Any recent changes to analyst estimates for Thermo Fisher Scientific should also be noted by investors. Recent revisions tend to reflect the latest near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection remained stagnant. Thermo Fisher Scientific currently has a Zacks Rank of #3 (Hold).

Looking at its valuation, Thermo Fisher Scientific is holding a Forward P/E ratio of 23.65. For comparison, its industry has an average Forward P/E of 29, which means Thermo Fisher Scientific is trading at a discount to the group.

Investors should also note that TMO has a PEG ratio of 1.82 right now. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. Medical - Instruments stocks are, on average, holding a PEG ratio of 1.85 based on yesterday's closing prices.

The Medical - Instruments industry is part of the Medical sector. This group has a Zacks Industry Rank of 97, putting it in the top 39% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Make sure to utilize Zacks.com to follow all of these stock-moving metrics, and more, in the coming trading sessions.


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