20250425-招银国际-Taking_measures_to_counteract_macro_headwinds_6页_1mb

Thermo Fisher (TMO US) Summary

Core Content

Thermo Fisher Scientific (TMO US) reported its 1Q25 financial results, showing revenue of $10.4 billion, a 0.2% increase YoY, and adjusted EPS of $5.15, an 0.8% rise YoY. These results exceeded Bloomberg's consensus by 1.3% and 0.8%, respectively. However, the quarter had two fewer selling days compared to 1Q24, which negatively impacted growth across all segments by approximately 1-2%.

The company has maintained its full-year revenue guidance at the midpoint, projecting growth of 1.0% to 3.1% for 2025, but revised its adjusted EPS guidance downward, anticipating a range from a 0.6% decline to 4.4% growth. The revised guidance is primarily influenced by the impact of tariffs, which are expected to reduce the adjusted operating margin by 1.2 ppts and lower adjusted EPS by $1.0.

Main Points

Revenue and Market Performance

• 1Q25 Revenue: $10.4 billion (up 0.2% YoY)
• 1Q25 Adjusted EPS: $5.15 (up 0.8% YoY)
• Bloomberg Consensus: Revenue was 1.3% higher than expected, while EPS was 0.8% higher
• Full-Year Revenue Guidance (2025): 1.0% to 3.1% growth
• Adjusted EPS Guidance (2025): 0.6% decline to 4.4% growth

End-Market Performance

• Pharma and Biotech: Low-single-digit growth, driven by CDMO, bioproduction, and research/safety markets
• Academic and Government: Low single-digit decline, mainly due to US policy changes affecting equipment sales
• Geographic Performance:
  • North America: Flat
  • Europe: Low single-digit growth
  • Asia-Pacific: Low single-digit growth, with a mid-single-digit decline in China

Impact of Tariffs

1. Bilateral Trade Reduction: Elevated US-China tariffs are expected to reduce trade, with a $400 million reduction incorporated into revenue guidance
2. Weakening US Dollar: Broader US tariffs may lead to a weaker dollar, positively contributing $600 million to revenue guidance
3. Margin Impact: Adjusted operating margin is expected to decrease by 1.2 ppts
4. EPS Impact: Adjusted EPS guidance has been lowered by $1.0, with $0.7 directly attributed to tariffs
5. Long-Term Opportunities: Tariffs are expected to create new mid-to long-term opportunities by leveraging US-based manufacturing facilities

Key Information

Strategic Measures

• Supply Chain Realignment: Implemented to address macro challenges
• Cost Management: Active cost management to improve efficiency
• Price Increases: Appropriate price increases to maintain profitability
• Investment Plans: $2 billion to be invested over four years in expanding US manufacturing and R&D facilities

Analyst Recommendations

• Current Recommendation: Maintain BUY
• Target Price: $526.00 (down from previous $690.00)
• Price Performance: Down 21.9% from previous target price
• Current Price: $431.64
• Forecasted Growth:
  • Revenue: 2.2% / 5.2% / 8.1% YoY for 2025E / 2026E / 2027E
  • Adjusted EPS: 2.5% / 11.9% / 13.3% YoY for 2025E / 2026E / 2027E
• Conservative Outlook: Forecasts are more conservative than Bloomberg consensus for adjusted EPS but higher for revenue

Financial Summary

Valuation Analysis

DCF Valuation (in US$ billion)

Valuation Range Based on Sensitivity Analysis

Analyst Certification and Disclaimers

• The analyst certifies that the views expressed accurately reflect personal views and that compensation is not directly related to the report's content.
• The analyst confirms no trading in the stock covered within 30 days before the report's issue date and no trading within 3 business days after.
• The report is not tailored and should not be construed as an offer or solicitation.
• CMBIGM is not liable for any loss, damage, or expense incurred from relying on the report.
• The report is based on publicly available information and is provided on an "AS IS" basis.
• It is subject to change and may include different assumptions and analyses compared to other publications.
• CMBIGM may have investment positions or relationships with the companies mentioned and may not be objective.

CMBIGM Ratings

• BUY: Stock with potential return of over 15% over the next 12 months
• HOLD: Stock with potential return of +15% to -10% over the next 12 months
• SELL: Stock with potential loss of over 10% over the next 12 months
• NOT RATED: Stock is not rated
• OUTPERFORM: Industry expected to outperform the relevant broad market benchmark
• MARKET-PERFORM: Industry expected to perform in-line with the relevant broad market benchmark
• UNDERPERFORM: Industry expected to underperform the relevant broad market benchmark

Important Disclosures

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• Past performance does not indicate future results
• Actual events may differ materially from those in the report
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