KeyBanc Capital Markets analyst Paul Knight reiterated the Overweight rating on Danaher Corporation (NYSE: DHR), lowering the price target to $300 from $325.
Knight notes that after a strong period in 2021 and early 2022, the life science tools sector, including DHR, has been underperforming in FY23.
The analyst adds that there have been headwinds due to destocking in consumables used in biological production (such as filters and single-use bags), leading to reduced demand as customers worked down stockpiles in FY23.
Additionally, funding for early-stage biotech customers has dried up as exit the pandemic, and weakness in China brought biotech spending to a slow pace during the 2Q23 results period, the analyst cautioned.
However, on the positive side, Knight writes Danaher has a high-growth and high-margin profile following the Veralto (VLTO) spin.
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Related tickers: DHR, TMO, ABCM.
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