Danaher (DHR:NYS) Fundamental Valuation Report

Danaher (DHR:NYS) Fundamental Valuation Report

Fundamental Valuation Report

Danaher(DHR:NYS)

Healthcare:Diagnostics & Research

This Report was generated using the valuation tools available on StockCalc.com. For a free 30 day trial click here.

Close Price/Date
$252.92 (USD) 04/22/2021

Weighted Valuation
$266.33 (USD)

Overall Rating
Undervalued by 5.3%

Valuation Models Comparables: $302.90 (USD)
Valuation Methods This company is:
Cash Flow: Overvalued on a Cash Flow Valuation
Comparable Company: Undervalued on a Comparable Valuation
Asset: Overvalued on an Asset Valuation
According to Analyst consensus at $266.33 this stock is Undervalued

Company Overview (DHR:NYS USD)

Price 252.92
Range 248.05 – 256.10
52 week 157.66 – 252.92
Open 248.05
Vol / Avg. 3.99M/2.46M
Mkt cap 180.35B
P/E 51.72
Div/yield 0.72/0.00
EPS 4.89
Shares 713.07M
Beta 0.66

Company 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.

Valuation Details

 We have up to 6 valuation points for each company. Details are at the bottom of the report.

Discounted Cash Flow and Sensitivity Analysis for DHR:NYS

Using a discounted cash flow model we generated an intrinsic value of $183.06 (USD) for DHR:NYS

Sensitivity Analysis

(showing how changes in the input variables impact the DCF calculation)

DHR:NYS Current Values Valuation If Dropped * Valuation If Raised *
Calculated Value: $183.06 1% 5% 1% 5%
WACC (or Ke) 5.21 $232.23 $150.27
Terminal Growth Rate 0.20 $153.26 $227.73
Tax Rate 0.19 $195.38 $170.75
Cash Flow 9,460,383,000 $172.49 $193.63
Capital Expenditures -647,540,000 $182.40 $183.73
Long Term Debt 8,312,200,000 $183.65 $182.48

* Changes are absolute: ex WACC from 8% to 7%

Comparables Model

Using similar companies and price based ratios we generated a valuation of $302.90 (USD) for DHR:NYS. We also generated a valuation of $404.64 (USD) using other metrics and comparables.
The comparable companies were Illumina (ILMN:NAS), IDEXX Laboratories (IDXX:NAS), DexCom (DXCM:NAS), Thermo Fisher Scientific (TMO:NYS) and IQVIA Holdings (IQV:NYS).

Company DHR:NYS End Date Value
Earnings/Share $6.37 (USD)
Book Value/Share $51.18 (USD)
Sales/Share $31.01 (USD)
Cash Flow/Share $8.64 (USD)
EBITDA/Share $9.02 (USD)
Price Based on Comps Adjustment Factor (%)
$563.91 (USD) -47.4
$603.53 (USD) -72.9
$414.28 (USD) -30.9
$416.86 (USD) -27.2
$473.14 (USD) 0.0
DHR:NYS Ratios Used Average Values ILMN:NAS IDXX:NAS DXCM:NAS TMO:NYS IQV:NYS
51.72 PE Ratio 88.53 91.78 81.41 81.10 30.34 158.00
4.94 PB Ratio 24.23 12.70 74.00 21.73 5.51 7.22
8.16 PS Ratio 13.36 18.66 17.50 20.77 6.00 3.88
29.28 PCF Ratio 51.80 55.97 73.10 84.13 23.31 22.49
30.52 EV to EBITDA 52.45 53.17 59.91 103.02 19.97 26.17

Multiples

Using a multiples approach we generated a valuation of  $167.46 (USD) for DHR:NYS

Company DHR:NYS End Date Value
Earnings/Share $6.37 (USD)
Book Value/Share $51.18 (USD)
Sales/Share $31.01 (USD)
Cash Flow/Share $8.64 (USD)
EBITDA/Share $9.02 (USD)
Price Based on Comps Adjustment Factor
$203.01 (USD) 0
$144.97 (USD) 0
$127.75 (USD) 0
$184.15 (USD) 0
$177.45 (USD) 0
Ratios Ratio Average
PE Ratio 31.87
PB Ratio 2.83
PS Ratio 4.12
PCF Ratio 21.32
EV to EBITDA 19.67

Adjusted Book Value versus Historical Price to Book

The average the Price to Book ratio for  DHR:NYS for the last 10 years was  2.70

We ran the Adjusted Book Value for  DHR:NYS and generated a book value of  $56.85 (USD)
By multiplying these we get an adjusted valuation of  $153.62 (USD)

Analyst Data

In the Stockcalc database there are 3 analysts that provide a valuation for DHR:NYS. The 3 analysts have a concensus valuation for DHR:NYS for 2021 of $266.33 (USD).

DHR:NYS Danaher

Analyst Recommendation
Buy Hold Sell Rating
(of 5)
Guidance As Of
3 1 1 3.8000 Outperform 2021-4-21

Current Price: 252.92 USD

Analyst Consensus
USD Millions 2021 2022 2023
Mean EPS 7.79 8.31 8.95
# EPS Analysts 5 5 2
Mean Revenue 26,856.30 28,000.30 29,257.70
# Revenue Analysts 4 4 2
Mean Target Price 266.33
Mean Cash Flow 9.00 9.55 10.21
Mean EBITDA 8,224.50 8,681.60 9,441.50
Mean Net Income 5,612.90 5,979.50 6,766.40
Mean Debt Outstanding 9,962.20 6,983.50 3,737.60
Mean Tax Rate 20.40 20.40
Mean Growth Rate 11.31
Mean Capital Expenditure 715.60 727.90 682.90

Explanation of Valuation Models

We have up to 6 valuation points for each company in the database.

The Discounted Cash Flow (DCF) valuation is a cash flow model where cash flow projections are discounted back to the present to calculate value per share. DCF is a common valuation technique especially for companies undergoing irregular cash flows such as resource companies (mining, forestry, oil and gas) going though price cycles or smaller companies about to generate cash flow (junior exploration companies, junior pharma, technology firms…).

The Price Comparables valuation is the result of valuing the company we are looking at on the basis of ratios from selected comparable companies: Price to Earnings, Price to Book, Price to Sales, Price to Cash Flow, Enterprise Value (EV) to EBITDA. Each of these ratios for the selected comparable companies are averaged and multiplied by the values for the company we are interested in to calculate a value per share for our selected company.

We have included the Other Comparables as a way to value companies that cannot be valued using Earnings based ratios. This technique is very useful for companies still experiencing negative cash flows such as mining exploration firms. We use Cash/Share, Book Value/Share, MarketCap, 1 Year Return, NetPPE as the ratios here. Each of these ratios for the selected comparable companies are averaged and multiplied by the values for the company we are interested in to calculate a value per share for our selected company.

Multiples are similar to Price comparables where we look at current or historic ratios for the company in question to assess what it should be worth today based on those historic ratios. We use the same 5 ratios as in the price comparables and value the company with its historic averages.

With Adjusted Book Value (ABV) we calculate the book value per share for the company based on its balance sheet and multiply that book value per share by its historical price to book ratio to calculate a value per share.

If we have Analyst coverage for the company we use the consensus target price here.

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