Danaher Corporation

Danaher successfully navigated a dynamic operating environment in this quarter to deliver an all-around beat. The strength of its customer base business grew by 6% in this quarter. For the quarter, the gross profit margin was 61% and the operating margin was down due to lower COVID volume in its diagnostics and biotechnology businesses. Its reported revenue in its Biotechnology segment declined and core revenue was down. Later-stage clinical trials remain strong. Danaher’s component availability improved and the supply chain stabilized. Strong price realization helped the company offset inflationary pressures. The disciplined cost management helped it to continue its cadence of growth investments. These investments, along with DBS-driven execution, resulted in market share gains in several businesses in the quarter. Danaher has been improving filter and resin throughout the biotechnology group and reducing its best-in-class lead times at Aldevron. The company also experienced a softer demand globally for many of its evolving biotech customers with distinct pressures on liquidity. The number of genomic and biological medicines in development is higher. The company is experiencing promising development in the field of research on Alzheimer’s. We give Danaher a ‘Hold’ rating with a revised target price.