Jim Cramer has faith in Danaher’s turnaround as life sciences comes back to life
Life sciences stocks are seeing a resurgence — and that’s good news for Danaher . Connecting the dots to better times ahead for the struggling portfolio name, Jim Cramer thinks the industry turnaround is best illustrated by looking at Agilent Technologies ‘ recovery from a post-Covid rut. Shares are up around 50% from their April lows. The company late last month reported a solid quarter . What’s changed? Agilent CEO Padraig McDonnell pointed to a push to bring life sciences manufacturing back to the U.S., among other factors. Life sciences companies create tools and technologies used by pharmaceutical, biotech, and medical device firms. But the buck doesn’t stop with Agilent. The bottom line is that “if Agilent’s turning around, then I have to believe the arms dealers to the life science industry can keep making a comeback,” Jim Cramer said on “Mad Money” on Monday evening. “That includes everybody from Danaher to Thermo Fisher , Revvity , and Waters .” He added, “They’re all worth a closer look.” It’s been a tough few years for the industry since the pandemic boom, when demand for life science innovations surged. Danaher and competing companies soared, selling tons of bioprocessing equipment, lab instruments, and testing tools. In an effort to circumvent shortages, clients over-ordered, leading to a post-Covid bust once that demand died down. The aftermath was hard on Danaher investors as the stock struggled since its Covid-era record close of nearly $295 per share in September 2021. More recently , a strong quarter and guidance assurance in October revived Wall Street’s enthusiasm for Danaher. Shares rose 1% to just over $226 each Tuesday. They are up 30% from their April lows — the bulk of those gains have happened since late September. Morgan Stanley this week initiated coverage of Danaher with a buy-equivalent rating. “Danaher has refined its business model over recent years to skew exposure towards higher growth life science end markets,” analysts wrote. They said they’re more optimistic about Danaher’s setup into 2026 as demand normalizes. Morgan Stanley put a price target of $270 on Danaher, representing roughly 20% upside from Tuesday’s close. “It’s been really frustrating for the past couple of years, even though we bought it during the post-Covid washout. Turns out that was early, as the stock languished for a long time,” Jim said Monday night. But with the Street pointing to 2026 as a standout year for Danaher, expecting mid-single-digit revenue growth, there is reason to be optimistic. “If they can hit those targets, I bet the stock keeps running,” Jim said, adding that, in this case, the Club might consider trimming the position, again. On Oct. 27, we sold 70 Dahaner shares out of discipline, given the stock’s upswing and the S & P Short Range Oscillator ‘s move, at the time, into overbought territory. The Club still owns 400 Danaher shares at a nearly 2.4% portfolio weighting. Our price target is $240. (Jim Cramer’s Charitable Trust is long DHR. See here for a full list of the stocks.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust’s portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED.
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