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Danaher Corp DHR

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Morningstar’s Analysis

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Danaher Shares Remain Overvalued as Operating Results Continue to Decelerate in Q3

Julie Utterback, CFA Senior Equity Analyst

Analyst Note

| Julie Utterback, CFA |

Narrow-moat Danaher turned in strong top- and bottom-line results that put the company on target to slightly exceed our expectations for 2021. We have tinkered with our near-term estimates, but we are not changing our $180 fair value estimate, which depends on current tailwinds turning into headwinds going forward. We continue to view the shares as overvalued at over $300 and more than 30 times 2021 expected earnings, especially since the company looks set to only generate low-double-digit earnings growth in a postpandemic environment.

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Company Profile

Business Description

In 1984, Danaher's founders transformed a real estate organization into an industrial-focused manufacturing company. Through a series of mergers, acquisitions, and divestitures, including the Fortive separation in 2016, Danaher now focuses primarily on manufacturing scientific instruments and consumables in three segments: life sciences, diagnostics, and environmental and applied solutions. In late 2019, Danaher separated from its dental business through an initial public offering process, and in early 2020, it acquired GE's Biopharma business, now called Cytiva, which added to its life sciences segment.

2200 Pennsylvania Avenue, North West, Suite 800W
Washington, DC, 20037-1701
T +1 202 828-0850
Sector Healthcare
Industry Diagnostics & Research
Most Recent Earnings Sep 30, 2021
Fiscal Year End Dec 31, 2021
Stock Type Aggressive Growth
Employees 69,000