If you have been wondering whether Danaher at around $230 a share is a bargain in disguise or a quality name priced for perfection, you are not alone. This breakdown is designed to give you a clear, calm answer.
Over the last month the stock has climbed about 9.1%, even though it is only up 0.3% year to date and is still roughly flat over three years. This tells us sentiment has shifted recently even if long term returns have been muted.
That renewed interest has come as investors refocus on Danaher’s role in life sciences tools and diagnostics, where its portfolio spans everything from bioprocessing equipment to lab automation. At the same time, headlines around portfolio reshaping and ongoing integration of past acquisitions have reminded the market that Danaher is still actively fine tuning its mix of businesses rather than standing still.
Despite that backdrop, Danaher currently scores just 0/6 on our valuation checks, which suggests the market is not obviously underpricing its cash flows or assets based on standard models. Next we will unpack those methods in detail, then circle back to a way of thinking about valuation that ties the numbers to Danaher’s long term narrative.
Danaher scores just 0/6 on our valuation checks. See what other red flags we found in the full valuation breakdown.
A Discounted Cash Flow model estimates what a business is worth today by projecting its future cash flows and then discounting them back into current dollars. For Danaher, the model used is a 2 Stage Free Cash Flow to Equity approach, built on cash flow projections rather than earnings.
Danaher generated about $5.0 billion in free cash flow over the last twelve months, and analysts see this figure rising to roughly $7.0 billion by 2028. Beyond those analyst years, Simply Wall St extrapolates further growth out to 2035, with free cash flow approaching about $10.0 billion, before discounting each future year back to today in dollar terms.
Putting all of those discounted cash flows together gives an estimated intrinsic value of about $218 per share, compared with a current market price around $230. On this view, the stock screens as roughly 5.7% overvalued, which is a relatively small gap and well within the normal margin of error for any model.
Result: ABOUT RIGHT
Danaher is fairly valued according to our Discounted Cash Flow (DCF), but this can change at a moment’s notice. Track the value in your watchlist or portfolio and be alerted on when to act.
DHR Discounted Cash Flow as at Dec 2025
Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for Danaher.
For a consistently profitable business like Danaher, the Price to Earnings ratio is a useful way to judge how much investors are paying for each dollar of current earnings. It ties directly to what matters most for mature, cash generative companies: how much profit they can produce today and grow over time.
What counts as a fair PE depends on two big levers: how fast earnings are expected to grow and how risky or cyclical those earnings are. Higher growth and more resilient profits usually justify a higher multiple, while slower growth or more uncertainty should drag it lower. Danaher currently trades on about 46.5x earnings, well above both the Life Sciences industry average of roughly 34.1x and the peer group average near 32.0x.
Simply Wall St also calculates a Fair Ratio, a proprietary PE estimate that reflects Danaher’s specific growth outlook, profitability, industry, size and risk profile. This tends to be more informative than a simple peer comparison, which can overlook important differences in business quality. Danaher’s Fair Ratio is about 32.1x, far below its current 46.5x, implying the market is pricing in more optimism than the company’s fundamentals alone would support.
Result: OVERVALUED
NYSE:DHR PE Ratio as at Dec 2025
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Earlier we mentioned that there is an even better way to understand valuation. Let us introduce Narratives, a simple framework on Simply Wall St’s Community page that lets you attach a clear story and set of assumptions to a company like Danaher, link that story to a financial forecast for revenue, earnings and margins, and then translate it into a Fair Value you can compare to today’s price to help you decide whether to buy, hold or sell.
Narratives are dynamic rather than static. When new information arrives, such as earnings releases, guidance changes or major news, your Fair Value and thesis are refreshed automatically, helping you stay aligned with your latest view without rebuilding spreadsheets from scratch.
Looking at Danaher today, one investor might lean toward the more bullish Narrative implied by a Fair Value near $310 per share, reflecting confidence in premium growth, margin expansion and share repurchases. Another might choose a more cautious Narrative closer to $205, emphasizing China risks, funding headwinds and slower tools demand. Both positions are made explicit and testable through their underlying forecasts rather than just a gut feeling.
Do you think there’s more to the story for Danaher? Head over to our Community to see what others are saying!
NYSE:DHR 1-Year Stock Price Chart
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
Companies discussed in this article include DHR.
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