Danaher Gains From Strength in the Diagnostics Unit Amid Headwinds

Danaher Corporation DHR has been benefiting from solid momentum in its clinical diagnostics business, driven by growth in the Leica Biosystems and Beckman Colter Diagnostics units. The company has been witnessing positive responses for its new products like Aperio GT 450 DX and Access NT ProBNP, which both received the FDA 510K clearance. Also, solid momentum in the molecular diagnostics business, led by increased respiratory and non-respiratory disease tests, has been buoying the Diagnostics segment.Solid momentum and market share gains for its Cepheid business also bode well for the segment. Core revenues from the Diagnostics segment increased 3% year over year in 2024. For 2025, Danaher anticipates core revenues from the Diagnostics segment to remain flat or increase in low-single-digits on a year-over-year basis.Danaher believes in adding complementary businesses to its portfolio via acquisitions. In December 2023, DHR acquired Abcam plc, a global supplier of protein consumables, for approximately $5.7 billion. This acquisition expanded the company’s Life Sciences segment. Abcam's long track record of innovation, outstanding product quality and breadth of antibody portfolio boosted Danaher’s healthcare product portfolio. Acquisitions boosted the company’s total revenues by 2% in 2024.DHR remains committed to rewarding shareholders through dividend payouts and share buybacks. For instance, it paid out dividends worth $768 million and $821 million in 2024 and 2023, respectively. Also, in February 2025, the company hiked its dividend by 18.5% to 32 cents per share.Downsides of DHRDespite the positives, sluggish demand across pharma and biotech markets in China has been weighing on Danaher’s Instrument businesses under the Life Sciences segment. The company has been witnessing a sales decline in mass spectrometry, flow cytometry & lab automation solutions and microscopy businesses due to soft demand for equipment in major end markets. Core revenues from the Life Sciences segment declined 2% on a year-over-year basis in 2024. Also, weakness in the company’s Biotechnology segment raises concerns. Sluggish demand in the discovery and medical business has been weighing on the performance of the Biotechnology segment. The segment’s core revenues declined 4.5% on a year-over-year basis in 2024.High debt levels have also been a concern for Danaher. It exited fourth-quarter 2024 with a long-term debt of $15.5 billion. Its current liabilities were $6.8 billion, higher than the cash equivalents of $2.1 billion. Also, interest expenses in 2024 remained high at $278 million.DHR’s Price PerformanceIn the past year, this Zacks Rank #3 (Hold) company has declined 19% compared with the industry’s 16% decrease.Image Source: Zacks Investment ResearchKey PicksSome better-ranked stocks from the same space are discussed below:Pediatrix Medical Group, Inc. MD presently sports a Zacks Rank # 1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.The company delivered a trailing four-quarter average earnings surprise of 19.4%. In the past 60 days, the Zacks Consensus Estimate for MD’s 2025 earnings has increased 5.4%.Cencora, Inc. COR currently carries a Zacks Rank #2 (Buy). COR delivered a trailing four-quarter average earnings surprise of 5%.In the past 60 days, the consensus estimate for Cencora’s fiscal 2025 (ending September 2025) earnings has increased 1.5%.Enhabit, Inc. EHAB presently carries a Zacks Rank of 2. The company delivered a trailing four-quarter average earnings surprise of 2.9%.In the past 60 days, the Zacks Consensus Estimate for EHAB’s 2025 earnings has increased 27.6%.7 Best Stocks for the Next 30 DaysJust released: Experts distill 7 elite stocks from the current list of 220 Zacks Rank #1 Strong Buys. They deem these tickers "Most Likely for Early Price Pops."Since 1988, the full list has beaten the market more than 2X over with an average gain of +23.9% per year. So be sure to give these hand picked 7 your immediate attention. See them now >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Danaher Corporation (DHR): Free Stock Analysis Report Pediatrix Medical Group, Inc. (MD): Free Stock Analysis Report Cencora, Inc. (COR): Free Stock Analysis Report Enhabit, Inc. (EHAB): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks