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• Ever wondered if Thermo Fisher Scientific’s stock is truly worth its current price? Let’s dive into what those numbers may be telling us.

• The share price has climbed an impressive 14.4% over the past year, with a 12.2% gain so far in 2024. This signals growing investor confidence and possible changes in how the market perceives the company’s risks and rewards.

• Recently, Thermo Fisher has been in the spotlight after expanding partnerships with major pharmaceutical players and making acquisitions aimed at boosting its life sciences capabilities. These moves have not only captured the industry’s attention but may also have played a role in the recent share price uplift.

• According to Simply Wall St’s value checks, Thermo Fisher Scientific scores a 3 out of 6 on the undervalued scale. This gives us a jumping-off point for examining how the market values this stock. Stay tuned, as we will unpack commonly used valuation approaches and reveal what might be an even smarter way to think about valuation later in the article.

Thermo Fisher Scientific delivered 14.4% returns over the last year. See how this stacks up to the rest of the Life Sciences industry.

The Discounted Cash Flow (DCF) model estimates a company’s true value by projecting its future cash flows and then discounting those amounts back to today’s dollars. This approach aims to capture the intrinsic worth of Thermo Fisher Scientific based solely on its ability to generate cash in the years ahead.

Currently, Thermo Fisher Scientific reports a Free Cash Flow (FCF) of $6.1 Billion. Analyst forecasts show FCF rising steadily each year, reaching a projected $11.3 Billion by 2029. While these analyst estimates extend for about five years, forecasts beyond that are extrapolated to provide a longer-term picture of cash generation potential.

According to the DCF analysis, Thermo Fisher Scientific’s intrinsic value stands at $605.35 per share. Based on recent share prices, the stock is trading at about a 3.2% discount to this estimated fair value. This suggests the market price and the underlying value are quite closely aligned.

Result: ABOUT RIGHT

Thermo Fisher Scientific 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.

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for Thermo Fisher Scientific.

For profitable companies like Thermo Fisher Scientific, the Price-to-Earnings (PE) ratio is one of the most widely used methods to gauge valuation. This metric compares a company’s share price to its per-share earnings, making it particularly useful for investors trying to determine if a stock is expensive or attractively priced relative to profits.

The appropriate, or “fair,” PE ratio for a company reflects expectations of both future growth and risk. Companies with higher growth prospects or lower risk usually command higher multiples, while those facing uncertainty or slower growth often see lower ratios.

Thermo Fisher Scientific has a current PE ratio of 33.5x. This compares with an industry average of 35.7x and a peer average of 36.9x, suggesting its valuation is slightly lower than its sector peers. However, industry averages do not tell the full story as they may not factor in Thermo Fisher’s unique growth, profitability, and risk profile.

Simply Wall St provides a “Fair Ratio” calculation, which considers factors like the company’s earnings growth, profit margins, industry sector, size, and risks. With a Fair Ratio for Thermo Fisher of 29.9x, we see that the stock’s current multiple is only marginally higher than what we’d expect for a business like this. Unlike comparisons to peers or industry averages, the Fair Ratio gives a more tailored assessment by blending all the relevant fundamentals.

Given the small difference between the Fair Ratio (29.9x) and Thermo Fisher’s current PE (33.5x), the stock appears to be priced about right by this measure, neither substantially overvalued nor undervalued.

Result: ABOUT RIGHT

PE ratios tell one story, but what if the real opportunity lies elsewhere? Discover 1440 companies where insiders are betting big on explosive growth.

Earlier we mentioned that there is an even better way to understand valuation, so let’s introduce you to Narratives. A Narrative is a simple, approachable tool that lets investors tell the story behind their numbers by combining their perspective on a company’s future (like assumptions about fair value, future revenue, earnings, and margins) with a clear financial forecast and estimated fair value.

By connecting Thermo Fisher Scientific’s business story to concrete projections, then comparing that fair value to the current price, Narratives help you make buy or sell decisions with more confidence and transparency. These are available to all users on Simply Wall St’s Community page, making powerful valuation tools accessible to millions of everyday investors.

One major advantage is that Narratives update automatically as new information comes in, whether it is earnings reports or industry news, ensuring your investment case stays relevant. For example, based on recent perspectives, one investor’s bullish Narrative might see Thermo Fisher’s fair value at $767 per share, factoring in strong R&D growth and margin expansion. A more cautious Narrative might set fair value at $490, emphasizing sector headwinds and regulatory risks. Narratives empower you to clearly see which story you believe, adjust with real-time facts, and make wiser decisions as new data emerges.

For Thermo Fisher Scientific, however, we’ll make it really easy for you with previews of two leading Thermo Fisher Scientific Narratives:

• 🐂 Thermo Fisher Scientific Bull Case

  Fair value: $613.58

  Currently trading at 4.5% below this fair value

  Revenue growth assumption: 5.2%

  • Analysts see consistent expansion in pharma manufacturing, innovation in analytical tools, and deeper customer relationships as engines of long-term recurring revenue and competitive advantage.

  • Cost discipline, AI-driven productivity, and ongoing acquisitions are forecast to boost margins and support sustainable returns even if core demand is muted.

  • Risks include uncertainty in academic/government funding, margin pressure from global headwinds, and some leadership transition risk. The consensus price target sits well above current prices.

• 🐻 Thermo Fisher Scientific Bear Case

  Fair value: $540.27

  Currently trading at 8.5% above this fair value

  Revenue growth assumption: 7%

  • Demand resilience and recurring revenues from services and consumables underpin stability, but pandemic-related tailwinds are fading and M&A integration poses new challenges.

  • Long-term catalysts include growth in personalized medicine and emerging markets. Regulatory hurdles, macro slowdowns, or acquisition overreach could weigh on future results.

  • Valuation is seen as fair but no longer deeply discounted, so further upside relies on TMO outperforming already strong expectations while avoiding sector or execution risks.

Do you think there’s more to the story for Thermo Fisher Scientific? Head over to our Community to see what others are saying!

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 TMO.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com

US dollar strength drives AUD/USD lower amid global risk aversion

AUD/USD finished lower last week at 0.6455, down 1.22%. The decline came against a backdrop of broad-based US dollar, with the US Dollar Index (DXY) hitting its highest level since late May.

The big dollar’s rally was fuelled by a combination of risk-aversion flows, disappointing economic data out of Europe and the United Kingdom, and a sharp sell-off in the Japanese yen ahead of the sizeable fiscal stimulus package formally approved on Friday. Reinforcing the move, several regional Federal Reserve (Fed) presidents sounded hawkish, expressing concerns about additional rate cuts due to lingering inflation risks.

Dovish tone emerges ahead of December meeting

However, that hawkish tilt began to reverse on Friday when New York Fed President John Williams indicated he still saw scope to lower rates further ‘in the near term’. The dovish message gained further traction overnight when Fed Governor Christopher Waller noted that the recent softening in the labour market made a December rate cut quite plausible.

The probability of a 25 basis point (bp) cut at the 10 December Federal Open Market Committee (FOMC) meeting has surged from around 30% in the middle of last week to approximately 80% now. This rapid repricing of Fed expectations has provided immediate support to AUD/USD and other risk-sensitive assets, allowing the pair to stabilise into the Friday close and extend a modest recovery into the early part of this week.

Key drivers ahead

Whether a stronger bounce can follow will depend on several key drivers:

1. It is crucial that risk sentiment remains stable.
2. Month-end rebalancing flows are expected to support the Australian dollar due to the Australian stock market’s underperformance this month.
3. The market will be influenced by upcoming US data releases tonight, including the producer price index (PPI), retail sales and consumer confidence, followed by an inflation update in Australia tomorrow previewed below.
4. Tomorrow’s Reserve Bank of New Zealand (RBNZ) interest rate meeting. While a 25 bp rate cut is widely expected, a larger 50 bp cut cannot be ruled out, which would weigh heavily on NZD/USD and, to a lesser extent, AUD/USD.

October inflation

Date: Wednesday, 26 November at 11.30am AEDT

Australia is transitioning from a quarterly to a full monthly consumer price index (CPI) as its primary measure of headline inflation – a change that will start this Wednesday. This alignment with other Group of Twenty (G20) countries will facilitate easier comparisons of inflation trends with other advanced economies.

There is ongoing debate about whether the new monthly data should be compared with the previous quarterly figures or the last monthly CPI indicator, and it will take time before the Reserve Bank of Australia (RBA) can fully rely on the monthly CPI for a complete and accurate assessment of inflation pressures compared to the more consistent quarterly data.

Although neither option provides a perfect comparison, we have opted to go with the recently released third quarter (Q3) numbers for clarity. In Q3 2025, headline CPI rose 1.3% quarter-on-quarter (QoQ), bringing the annual rate to 3.2% year-on-year (YoY), up from 2.1% previously. The trimmed mean increased 1.0% QoQ, lifting its annual rate to 3.0% YoY from 2.7%, marking the first increase since December 2022.

Following this, expectations are for a monthly increase of 3.6% over the year and for a reading of 2.9% for the trimmed mean. The Australian interest rate market starts the day pricing in 2 bp of easing for the RBA’s December meeting, with roughly 13 bp of cuts anticipated by May 2026.

 All groups CPI and trimmed mean chart