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Gauging Thermo Fisher’s Risk Factors

Shares of Thermo Fisher Scientific, Inc. (TMO), the provider of Analytical Instruments, Specialty Diagnostics, Life Sciences Solutions and Laboratory Products and Services, have gained 30.7% so far this year.

Recently, the company delivered better-than-anticipated third-quarter Fiscal Year 2021 results on the back of strong performance witnessed in Laboratory Products and Services segment.

Let’s have a look at what’s changed in the company’s risk factors that investors should know.

Risk Factors

According to the new Tipranks’ Risk Factors tool, TMO’s main risk category is Legal & Regulatory, which accounts for 21% of the total 24 risks identified for the stock. In its recent Q3 report, the company has added one key risk factor under the Finance & Corporate risk category.

TMO highlights that additional long-term debt and lines of credit to meet its future financing needs would increase the company’s total leverage. However, higher leverage could negatively impact TMO by increasing its vulnerability to adverse economic and industry changes, limiting the company’s ability to tap additional financing and acquire new products and technologies via strategic acquisitions. On October 2, TMO had long-term obligation of $21.69 billion.

The Finance & Corporate risk factor’s sector average stands at 31%, compared to TMO’s 17%.

Wall Street’s Take

On October 28, Morgan Stanley analyst Tejas Sawant initiated coverage on the stock with a Buy rating and a price target of $700, which implies upside potential of 12.6%.

Following the robust Q3 showing and TMO’s reasonable valuation, Sawant believes that TMO is in a position to outperform in 2022.

Consensus on the Street is a Strong Buy based on 14 Buys and 1 Hold. The average Thermo Fisher price target of $677.13 implies upside potential of 8.78% for the stock.

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