Is Danaher Stock Underperforming the S&P 500?

With a market cap of $148.5 billion, Washington, the District Of Columbia-based Danaher Corporation (DHR) is a global conglomerate that designs, manufactures, and markets a diverse range of professional, medical, research, and industrial products. It operates through key segments, including Biotechnology, Life Sciences, and Diagnostics, serving industries such as biopharmaceuticals, healthcare, aerospace, and food safety.

Companies valued at $10 billion or more are generally considered “large-cap” stocks, and Danaher fits this criterion perfectly. It is a pioneering American conglomerate known for its adoption of Kaizen principles and has grown through strategic acquisitions across life sciences, diagnostics, and biotechnology.

Despite a 26.3% decline from its 52-week high of $281.70 reached in August last year, shares of the industrial and medical device maker have declined 13.8% over the past three months, underperforming the broader S&P 500 Index’s ($SPX) 1.7% drop over the same time frame. 

In the longer term, DHR stock is down 9.5% on a YTD basis, lagging behind SPX’s 1.1% gain. Moreover, shares of Danaher have dipped 18.8% over the past 52 weeks, compared to the 15.8% return of the SPX over the same time frame.

DHR has been trading below its 50-day and 200-day moving averages since late October, last year.

Despite reporting better-than-expected Q4 2024 revenue of $6.5 billion, shares of Danaher dropped 9.7% on Jan. 29. The company’s adjusted EPS of $2.14 missed the consensus estimate, while its Q1 2025 guidance projected a low-single-digit decline in adjusted core sales. The Diagnostics segment underperformed, with revenue declining 3% year-over-year to $2.6 billion and operating profit falling 18.5% to $624 million.

DHR has experienced a less pronounced decline compared to its rival, Thermo Fisher Scientific Inc. (TMO), which has dropped 9.1% over the past 52 weeks. Moreover, TMO saw a marginal rise on a YTD basis.

Despite DHR’s weak performance, analysts remain bullish about its prospects. The stock has a consensus rating of “Strong Buy” from the 24 analysts covering the stock, and as of writing, DHR is trading below the mean price target of $269.55.