On Monday, CFRA raised their rating on shares of Thermo Fisher Scientific (NYSE:TMO) from Hold to Buy, while also increasing the price target to $635 from the previous $522. This adjustment represents a significant increase and is based on the firm's forward-looking earnings projections.
The new stock price target of $635 is set at 26.2 times CFRA's projected earnings per share (EPS) for the year 2025. This valuation is slightly higher than Thermo Fisher's five-year historical average price-to-earnings (P/E) ratio. Despite a downward revision of the EPS estimate for 2024, CFRA maintains a positive outlook on the company's long-term financial performance.
CFRA's revised EPS estimate for 2024 is now $21.74, which is a decrease of $0.19 from their previous forecast. This change is primarily due to a lowered expectation for the first quarter of 2024, with the EPS estimate for Q1 being cut to $4.78 from $5.02. Still, the firm's EPS projection for the year 2025 remains unchanged.
The upgrade reflects CFRA's confidence in Thermo Fisher's growth prospects and their belief that the stock's valuation is justified given the company's anticipated future earnings. The new price target suggests that CFRA sees a considerable upside potential for Thermo Fisher's stock in the coming years.
Investors in Thermo Fisher Scientific may view this upgrade as a positive signal, as it indicates analyst optimism about the company's financial health and market position. The stock's performance following this rating change will be watched closely by market participants.
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