Danaher Corp.

Overview Key strengths Key risks Strong, well-established competitive positions across segments. Likely to remain acquisitive, potentially leading to leverage above 3x. Serving end markets with favorable dynamics, with our expectation for long-term organic revenue growth of mid-single digits. Some financial risk from possible missteps integrating recent and future acquisitions. Significant product and customer diversity and global presence in both mature and higher-growth regions. Unpredictable macroeconomic environment has slowed organic revenue growth in recent quarters. Business is relatively predictable, with stable demand and a high level of repeat business, given the consumable nature of products, and strong organic growth prospects. Declining COVID-19 vaccine and therapies sales were expected, but bioprocessing customer destocking, an across-the-board Chinese market slowdown, and a quiet biotech

...Danaher Corp.'s organic revenue growth has moderated recently due to an unpredictable macroeconomic environment. Declining COVID-19 vaccine and therapies sales were expected, but bioprocessing customer destocking, an across-the-board Chinese market slowdown, and a quiet biotech initial public offering (IPO) market (resulting in fewer phase I trials) has significantly stunted revenue growth. These headwinds were not exclusive to Danaher, but their impact flattened core revenue growth in 2023. Excluding the impact of COVID-19 sales and the fourth quarter spin of Veralto (the environmental and applied solutions business), core revenue declined by around 1%. These macro trends continued through the first quarter of 2024 (most notably in bioprocessing, which decreased year-over-year at a high-teens rate), though S&P Global Ratings expects many of the headwinds to alleviate in the second half of the year as customer destocking slows and demand improves. We forecast that core revenue growth will...

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