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Today we're going to take a look at the well-established Danaher Corporation (NYSE:DHR). The company's stock received a lot of attention from a substantial price movement on the NYSE over the last few months, increasing to US$282 at one point, and dropping to the lows of US$241. Some share price movements can give investors a better opportunity to enter into the stock, and potentially buy at a lower price. A question to answer is whether Danaher's current trading price of US$260 reflective of the actual value of the large-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at Danaher’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.
Check out our latest analysis for Danaher
What Is Danaher Worth?
The stock seems fairly valued at the moment according to my valuation model. It’s trading around 3.71% above my intrinsic value, which means if you buy Danaher today, you’d be paying a relatively fair price for it. And if you believe the company’s true value is $250.56, then there isn’t really any room for the share price grow beyond what it’s currently trading. Furthermore, Danaher’s low beta implies that the stock is less volatile than the wider market.
Can we expect growth from Danaher?
Future outlook is an important aspect when you’re looking at buying a stock, especially if you are an investor looking for growth in your portfolio. Buying a great company with a robust outlook at a cheap price is always a good investment, so let’s also take a look at the company's future expectations. Danaher's earnings growth are expected to be in the teens in the upcoming years, indicating a solid future ahead. This should lead to robust cash flows, feeding into a higher share value.
What This Means For You
Are you a shareholder? It seems like the market has already priced in DHR’s positive outlook, with shares trading around its fair value. However, there are also other important factors which we haven’t considered today, such as the financial strength of the company. Have these factors changed since the last time you looked at the stock? Will you have enough confidence to invest in the company should the price drop below its fair value?
Are you a potential investor? If you’ve been keeping an eye on DHR, now may not be the most optimal time to buy, given it is trading around its fair value. However, the optimistic prospect is encouraging for the company, which means it’s worth diving deeper into other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.