Danaher (NYSE:DHR) Q3 2020 Earnings Prep

in EARNINGS/INVESTING IDEAS by

Danaher Corporation (NYSE:DHR) is scheduled to report Q3 earnings results on October 22, 2020.

The company is expected to report earnings of $1.36/share on revenue of $5.509 billion. The consensus earnings per share (EPS) of $1.36/share is based on a poll of 16 analysts and represents a growth in eps of 17.3% over the same quarter last year, when the company reported earnings of $1.16/share.

The revenue forecast of $5.509 billion based on a poll of 15 analysts implies a year-over-year (YoY) growth in revenue of 9.4%. Last year the company reported $5.037 billion in revenue for the quarter.

Expected to report EPS growth of 17.3% for Q3, 2020
Metric Expected Prior Year YoY Change
Revenue $5,508.80 $5,037.30 9.4%
EPS $1.36 $1.16 17.3%

Earnings Call Trends

Historically, management has exceeded analyst expectations 7 out of the last 8 tracked quarters, and met expectations 1 quarters.

What are your expectations from Danaher Corporation for earnings this quarter? Let us know in the comments!

Analyst Expected vs. Reported EPS
Quarter Expected Reported Surprise Result
Q2, 2020 $1.09 $1.44 31.9% Beat
Q1, 2020 $1.02 $1.05 2.7% Beat
Q4, 2019 $1.25 $1.28 2.3% Beat
Q3, 2019 $1.15 $1.16 0.8% Beat
Q2, 2019 $1.16 $1.19 2.5% Beat
Q1, 2019 $1.02 $1.07 5.0% Beat
Q4, 2018 $1.27 $1.28 0.6% Beat
Q3, 2018 $1.08 $1.10 2.3% Beat

In the following table, we summarize the company’s stock price movements after earnings releases. The “Price Day Prior” column shows the closing stock price on the day before the earnings report, and the “Price Next Day” column shows the stock price at the end of the trading day after the earnings report. After the last earnings report for the period ending July 3, 2020, the stock price did not react much to the update.

Stock Price Performance After Earnings
Report Date Price Day Prior Price Next Day Change % Result
July 23, 2020 $195.61 $195.27 −0.2% Decline
May 6, 2020 $164.45 $163.48 −0.6% Decline
January 30, 2020 $165.22 $160.87 −2.6% Decline
October 24, 2019 $138.45 $135.87 −1.9% Decline

The other question to consider is one of earnings manipulation. There is a lot of pressure on management each quarter to deliver on earnings expectations. The Beneish M-Score is a statistical model that provides some insight into whether the company might be manipulating earnings. With a Beneish M-Score of −2.67, the model suggests that the company is not likely to be an earnings manipulator. A value of −2.67 implies a 0.4% chance of earnings manipulation.

Fundamentals And Technical Analysis

Danaher Corporation is currently trading at $223.83/share, down −1.6% for the day. The company is trading at approximately 97.6% of its 52-week high of $229.45/share. The company’s stock price is up 14.6% since the last earnings report and down −0.8% over the previous week.

The company’s 14 Day Relative Price Index (RSI) of 65.06 suggests the company is trading in technically neutral territory. The RSI is considered overbought when above 70 and oversold when below 30.


NYSE:DHR Stock Price Chart
Source: Finbox

The current share price implies a price-to-earnings (P/E) multiple of 55.66 and a forward P/E multiple of 40.33.

Danaher Corporation’s current share price also implies a price-to-book (P/B) multiple of 4.81. The following table summarizes some other key fundamental ratios:

Data as of October 20, 2020
Metric Value
Last Reported Fiscal Period Key FY2020.Q2
Period End Date July 3, 2020
Stock Price (Current) $223.83
P/E Ratio 55.7x
P/E Ratio (Fwd) 40.3x
PEG Ratio 1.5
Total Debt / Total Capital 12.4%
Levered Free Cash Flow $3.712 billion
EV / EBITDA 38.5x

Finbox

Danaher Corporation is a large-cap stock with a market capitalization of $158.8 billion and a total enterprise value of $179.8 billion. The company operates in the Healthcare sector and the Healthcare Equipment & Supplies industry.

Danaher Corporation designs, manufactures, and markets professional, medical, industrial, and commercial products and services worldwide. The company operates through three segments; Life Sciences, Diagnostics, and Environmental & Applied Solutions. The Life Sciences segment provides mass spectrometers; cellular analysis, lab automation, and centrifugation instruments; microscopes; and genomics consumables. This segment also offers filtration, separation, and purification technologies to the biopharmaceutical, food and beverage, medical, aerospace, microelectronics, and general industrial sectors. The Diagnostics segment provides chemistry, immunoassay, microbiology, and automation systems, as well as hematology and molecular diagnostics products. This segment offers analytical instruments, reagents, consumables, software, and services for hospitals, physicians’ offices, reference laboratories, and other critical care settings. The Environmental & Applied Solutions segment offers instrumentation, consumables, software, services, and disinfection systems to analyze, treat, and manage ultra-pure, potable, industrial, waste, ground, source, and ocean water in residential, commercial, industrial, and natural resource applications. This segment also provides equipment, software, services, and consumables for various color and appearance management, packaging design and quality management, packaging converting, printing, marking, coding, and traceability applications for consumer, pharmaceutical, and industrial products. The company was formerly known as Diversified Mortgage Investors, Inc. and changed its name to Danaher Corporation in 1984. Danaher Corporation was founded in 1969 and is headquartered in Washington, the District of Columbia.

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