Danaher Corp (DHR) Higher on Analyst Upgrade

NEW YORK (TheStreet) -- Danaher Corp (DHR) was moving higher on Tuesday after Bank of America issued an upgrade. 

The bank upgraded the industrial machinery manufacturer to a "buy" from "neutral" with a $90 price target. Bank of America sees growth driven by a pick-up in merger and acquisition activity and improving core growth.

By market open, shares had gained 2.2% to $77.84.

TheStreet Ratings team rates DANAHER CORP as a Buy with a ratings score of A+. The team has this to say about their recommendation:

"We rate DANAHER CORP (DHR) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, solid stock price performance, growth in earnings per share and expanding profit margins. Although no company is perfect, currently we do not see any significant weaknesses which are likely to detract from the generally positive outlook."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • DHR's revenue growth has slightly outpaced the industry average of 2.3%. Since the same quarter one year prior, revenues slightly increased by 5.7%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • DHR's debt-to-equity ratio is very low at 0.16 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.25, which illustrates the ability to avoid short-term cash problems.
  • Compared to where it was 12 months ago, this stock has enjoyed a nice rise of 29.56% which was in line with the performance of the S&P 500 Index. Turning to the future, naturally, any stock can fall in a major bear market. However, in almost any other environment, the stock should continue to move higher despite the fact that it has already enjoyed nice gains in the past year.
  • DANAHER CORP has improved earnings per share by 9.1% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, DANAHER CORP increased its bottom line by earning $3.23 versus $2.77 in the prior year. This year, the market expects an improvement in earnings ($3.41 versus $3.23).
  • The gross profit margin for DANAHER CORP is rather high; currently it is at 56.76%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 12.78% is above that of the industry average.

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