Analysts at Jefferies & Co reiterate their "buy" rating on Thermo Fisher Scientific TMO, while reducing their estimates for the company. The target price for TMO is set to $63.
According to the analysts, TMO's initial 2011 “core operating outlook along with longer-term base operating model parameters remain largely consistent with goals communicated prior to the severe global macroeconomic downturn in 2009.”
“TMO's operating performance metrics relative to a weighted average of those of its primary competitors deteriorated materially in 2009, which we attribute primarily to its discretion to limit the magnitude of cost rationalization efforts and elevate R&D and commercial investment intensity in key areas. Such behavior, when combined with the effects of relatively easier year-ago comparisons, suggests an elevated near-term opportunity for TMO to narrow what has been an inferior relative operational performance gap,” Jefferies mentions.
Analysts add, “However, it is our view that TMO will likely continue pursuing a balanced strategy that includes incremental tuck-in acquisitions and share repurchases, which should be adequate in addressing any lingering capital re-deployment concerns.”
Jefferies & Co has lowered its EPS estimates for the December quarter from $0.97 to $0.96.
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