There aren’t all that many companies for which COVID-19 has been a positive development, but Thermo Fisher (NYSE:TMO) (“Thermo”) has seen demand for lab consumables and testing supplies surge during the pandemic. Thermo is likewise highly leveraged to present-day R&D efforts aimed at COVID-19 therapies and vaccines, as well as future production efforts. With the biopharma industry still ramping up its bioproduction capabilities, Thermo has plenty of growth to look forward to even once the COVID-19 tailwinds ease.
You don’t go into life sciences looking for bargains; there’s the occasional hidden gem here and there, but by and large, a cheap-looking stock is cheap for a reason. That doesn’t apply to Thermo; Thermo is a top player in the field and priced accordingly. While the long-term returns suggested by discounted cash flow aren’t all that robust, the valuation isn’t so out of line for sector norms, and few companies of this size have Thermo’s growth leverage, nor its demonstrated ability to build value from M&A.
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COVID-19 Highlighting Thermo Fisher's Broad Life Sciences Exposure
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