Story updated at 10 a.m. to reflect market activity.
Danaher gained 1% to $74.80 in morning trading
The firm set a price target of $86 for the company. According to ISI Group analysts the market is shifting toward high-quality, large-cap companies with solid free cash-flow, such as Danaher.
Must read: Warren Buffett's 10 Favorite Growth Stocks
Separately, TheStreet Ratings team rates DANAHER CORP as a Buy with a ratings score of A. TheStreet Ratings 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, increase in net income, good cash flow from operations and solid stock price performance. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- DHR's revenue growth has slightly outpaced the industry average of 1.1%. Since the same quarter one year prior, revenues slightly increased by 5.8%. Growth in the company's revenue appears to have helped boost 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 1.45, which illustrates the ability to avoid short-term cash problems.
- The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and greatly outperformed compared to the Industrial Conglomerates industry average. The net income increased by 25.2% when compared to the same quarter one year prior, rising from $630.40 million to $789.30 million.
- Net operating cash flow has increased to $1,078.20 million or 34.83% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 24.66%.
- The stock has risen over the past year as investors have generally rewarded the company for its earnings growth and other positive factors like the ones we have cited in this report. Looking ahead, the stock's rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that the other strengths this company displays justify these higher price levels.
- You can view the full analysis from the report here: DHR Ratings Report