TMO Stock Forecast & Price Target

Thermo Fisher Scientific is anticipated to continue its strong performance by benefitting from a projected 5.4% compound annual growth rate in its lab products and services segment over the next three years, despite a decline from the impressive 16.9% growth experienced from 2019 to 2024. The company is expected to gain market share in the contract research organization (CRO) sector due to its robust solution set and scale, alongside favorable trends in biopharma clinical trial outsourcing as indicated by survey respondents looking to increase their outsourcing in both early and late-stage drug development. Additionally, while analytical instruments revenue is projected to grow at a slower rate of 2.5% CAGR over the next three years, this still supports Thermo Fisher’s overall growth trajectory within its diversified business segments.

Thermo Fisher Scientific experienced a significant decline in its adjusted EBIT margin, which fell by approximately 830 basis points from 2021 to 2024, resulting in a margin of 22.6%. This decline was primarily attributed to a steep reduction in the adjusted gross margin, which decreased by around 940 basis points during the same period, landing at 42.2%. Compared to 2019 levels, these metrics reflect a concerning trend, with both the adjusted EBIT margin and gross margin falling below historic benchmarks, indicating potential underlying financial challenges.