UBS’ Best Stocks In The AI, Growth & Low Rates Era: Top 29 US Stocks

19. Thermo Fisher Scientific Inc. (NYSE:TMO)

Number of Hedge Fund Investors In Q2 2024: 108

UBS’ Sector Rating: Neutral

Sector: Healthcare

Thermo Fisher Scientific Inc. (NYSE:TMO) is a pharmaceutical raw materials and lab equipment company. It is one of the largest firms of its kind, which is key for the industry that it operates in. This is because its market presence enables Thermo Fisher Scientific Inc. (NYSE:TMO) to develop deep industry partnerships for crucial materials that are used to make medicine. Yet, its reliance on the pharmaceutical industry, an already notoriously cyclical sector, coupled with the fact that 55% of Thermo Fisher Scientific Inc.’s (NYSE:TMO) revenue is from pharma hardware means that the firm depends to a large extent on robust economic performance. Consequently, it’s unsurprising that the shares are up by just 1.19% year to date. Thermo Fisher Scientific Inc.’s (NYSE:TMO) shares fell by 8% in October driven by several factors such as a weak third-quarter earnings report which saw its $10.6 billion revenue miss analyst estimates of $10.64 billion to stoke worries of a slower recovery in the pharma industry. However, Thermo Fisher Scientific Inc.’s (NYSE:TMO) $5.28 EPS beat analyst EPS of $5.25. The firm also raised the low guidance of its annual profit per share to $21.29 and its bread and butter lab products business revenue of $5.74 billion beat analyst estimates of $5.45.

Despite a slow pharmaceutical environment, Thermo Fisher Scientific Inc. (NYSE:TMO) is busy launching new products to capture growth when it picks up. Here’s what management shared during the Q3 2024 earnings call:

“To enable the development of advanced materials, we launched the Thermo Scientific Iliad scanning transmission electron microscope, which integrates a number of our advanced analytical technologies into a seamless and user-friendly workflow. This offers researchers deeper insights into the chemical nature of the most sophisticated advanced materials down to the atomic level.

The Iliad incorporates our most innovative high-resolution spectrometer to accurately determine the composition of materials, as well as our proprietary energy filter for detailed imaging and chemical analysis of samples. We recently unveiled Iliad at the European Microscopy Conference in Copenhagen, Denmark, and the feedback has been incredibly positive. Turning to innovations in life sciences within our biosciences business, we launched the Applied Biosystems MagMAX Sequential DNA/RNA kit, which maximizes the isolation of DNA and RNA from blood cancer samples, helping researchers identify unique insights of cancer-causing genetic alterations. And we also launched the Invitrogen Vivofectamine Delivery Solutions, a novel method for delivering nucleic acids into multiple targets with therapeutic effect, paving the way for groundbreaking new medicines.”