TMO Stock Forecast & Price Target

Thermo Fisher Scientific's revenue from lab products and services (LPBS) is forecasted to grow at a 5.4% compound annual rate over the next three years, supported by a robust historical growth rate of 16.9% from 2019 to 2024. The company is expected to gain further market share in the clinical research organization (CRO) sector, bolstered by favorable outsourcing trends in biopharma clinical trials, which indicate a significant increase in the outsourcing rates for both early-stage and late-stage drug development. Additionally, the projected adjusted earnings per share (EPS) growth of 8.5% compound annually over the next four years presents a strong financial outlook for Thermo Fisher Scientific.

Thermo Fisher Scientific has experienced a significant decline in its financial performance from 2021 to 2024, with adjusted EBIT margins decreasing approximately 830 basis points to 22.6%, primarily driven by a 940-basis-point drop in adjusted gross margins. The adjusted gross margin fell to 42.2%, which is 420 basis points lower than the 46.4% recorded in 2019, indicating a troubling trend in cost management and pricing power. Additionally, despite claims of improved biotech customer sentiment, funding for 2025 has started off poorly, with a 45% year-over-year decrease in the amount raised in the first half of the year, which could indicate future revenue challenges for the company.