While Danaher (NYSE:DHR) isn't trading below my fair value today, it's about as close as it ever gets and that tells me a lot about where sentiment is today. Looking at the performance over the last six months, only much-maligned GE (NYSE:GE) has done worse among Danaher peers/comps like Illinois Tool Works (NYSE:ITW), Honeywell (NYSE:HON), 3M (NYSE:MMM), and Thermo Fisher (NYSE:TMO), and there seems to be more angst around the company's quarterly reports and management's M&A strategy than I recall in past years.
That could be an interesting set-up for long-term investors. Although I don't think Danaher is especially well-placed for what investors seem to really want today (namely, leverage to a "metal and grease " industrial recovery), I still believe this is a well-constructed business for the long term. Mid single-digit revenue and free cash flow growth can support a fair value in the low $80s, and that makes Danaher worth considering in a market where many industrials have run ahead of fair value.
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Danaher Needs To Win Back Some Love