DHR
DANAHER CORP /DE/NYSEValuation snapshot
Above bull casePrice is above even the bull case.
Price as of Sep 4, 2026 · Valuation Sep 6, 2026
What drives DHR's base case?
base-case thesisDanaher's sales growth improved through the first half of 2026, with Life Sciences strengthening and underlying Diagnostics growth holding up after removing respiratory-test swings. Biotechnology orders remained healthy even though customer project timing slowed reported sales. This case assumes those end markets normalize, Masimo is integrated without major disruption, and the company converts a substantial portion of profit into cash.
What shapes the assumptions
Underlying company core sales excluding respiratory testing grew 0.045 in the latest quarter
Quarterly underlying core growth
Raises revenue growth
Life Sciences core growth accelerated from 0.005 to 0.055 between the first and second quarters
Life Sciences core sales growth
Raises revenue growth
Masimo-related items reduced the latest quarterly profit rate by 0.0175
Acquisition-related margin impact
Lowers operating margin
First-half free cash flow was $2.350 billion after $506 million of capital spending
Free cash flow and capital expenditures
Lowers reinvestment
Each driver links a business metric to the forecast assumption it shapes — the basis for this case, not investment advice.
Why the gap?
The market is pricing this as if revenue grows 26.2% a year. There is not enough reported history to say how that compares with what it has actually done.
What else could explain it?›
- Or, holding growth steady
- the price is also consistent with a 51.1% operating margin, against the 21.5% assumed here.
- How confident is this estimate?
- Robustness 52.0/10 (Moderate) — some of any gap is our own uncertainty rather than disagreement.
- What would change the answer?
- Which assumption this valuation swings on, and by how much.
Many combinations of assumptions reproduce the same price. These are ways to read what the market might be expecting, not the market's actual view. How this is worked out
Research & assumptions
Inspect the valuation thesis, cases, risks, evidence, and model inputs.
View details
Research & assumptions
Inspect the valuation thesis, cases, risks, evidence, and model inputs.
Three independently researched cases generated automatically from published financials. Every assumption is justified and cited; the discount rate is computed from researched market inputs.
Company value drivers
Ranked operating metrics and the valuation assumptions they influence.
1. Company core sales growth, quarterly
Measures growth from existing businesses before acquisitions and currency, making it the clearest recurring indicator of Danaher's underlying demand.
3.0%
reported2. Biotechnology core sales growth, quarterly
Tracks organic demand in Danaher's high-margin bioprocessing portfolio, where consumables and equipment orders materially influence both growth and profit.
2.5%
reported3. Life Sciences core sales growth, quarterly
Measures whether improving demand from pharmaceutical, biotechnology, applied, academic, and government customers is broadening beyond Biotechnology.
5.5%
reported4. GAAP operating margin, quarterly
Shows the portion of sales remaining after reported operating costs and captures mix, operating leverage, impairments, and acquisition integration.
18.0%
derived5. Free cash flow margin, quarterly
Measures free cash flow after capital expenditures relative to sales and indicates how efficiently reported growth becomes cash available for debt reduction or additional investment.
20.2%
derivedBase inputs from financials
source period →Base revenue (TTM)
$25.1B
Diluted shares
707,600,000
Net cash
-$20.8B
Bear
low confidence$29.23
IV / share
-86.1% vs $211.03
- Explicit cash flows
- $12.16
- Terminal value
- $46.47
- Net cash
- -$29.39
- Intrinsic value / share
- $29.23
159.0% of the value rests on the terminal value — high dependency. A small change to terminal growth moves the valuation a lot — see terminal growth below.
Revenue growth3.0% → 3.0% → 2.5% → 2.5% → 2.0%medium
How derived: Companywide core growth improved to 0.03 in the latest quarter, but Biotechnology slowed to 0.025 and Diagnostics pricing fell 0.015, so this path assumes the recovery stalls and growth gradually settles at 0.02.
Why this confidence: Current-year management guidance ↑, Volatile respiratory-testing demand and project timing ↓, Five-year forecast horizon ↓
Measured by
- Company core sales growth, quarterly3.0%reported
- Biotechnology core sales growth, quarterly2.5%reported
- Life Sciences core sales growth, quarterly5.5%reported
Evidence for
- Second-quarter 2026 core sales grew 0.03, Biotechnology core sales grew only 0.025, and management reduced full-year company core-growth guidance to 0.03-0.04.[Danaher Q2 2026 results]· primary
Evidence against
- Underlying second-quarter core sales excluding respiratory testing grew 0.045, Life Sciences core sales grew 0.055, and bioprocessing orders increased at a mid-teens rate.[Danaher Q2 2026 results]· primary
Operating margin18.5%medium
How derived: The latest quarterly GAAP margin was 0.1799 and the first-half margin was 0.202, so 0.185 assumes acquisition costs fade but weak mix, pricing pressure, and limited sales leverage prevent a return to the stronger first-quarter level.
Why this confidence: Reported quarterly and segment profitability ↑, Temporary acquisition-accounting charges ↓, Uncertain segment mix ↓
Measured by
- Biotechnology core sales growth, quarterly2.5%reported
- Life Sciences core sales growth, quarterly5.5%reported
- GAAP operating margin, quarterly18.0%derived
- Free cash flow margin, quarterly20.2%derived
Evidence for
- Second-quarter 2026 GAAP operating profit was $1.127 billion on $6.265 billion of sales, while Masimo-related items reduced the margin by 0.0175.[Danaher Q2 2026 Form 10-Q]· primary
Evidence against
- Biotechnology produced a 0.29 second-quarter segment margin, and higher core sales provided favorable operating leverage during the first half.[Danaher Q2 2026 Form 10-Q]· primary
Tax rate20.0%medium
How derived: The latest quarter's effective tax rate was 0.193, above the 0.179 first-half rate, so 0.20 allows for fewer discrete benefits and adverse changes in geographic earnings mix.
Why this confidence: Reported effective tax rates ↑, Geographic earnings mix ↓, Potential tax-law and audit changes ↓
No tracked driver measures this assumption yet.
Evidence for
- The effective tax rate reached 0.193 in the second quarter, including a 0.019 increase from net discrete tax charges.[Danaher Q2 2026 Form 10-Q]· primary
Evidence against
- Management expected an effective tax rate of approximately 0.17 for the remainder of 2026 because of the projected earnings mix.[Danaher Q2 2026 Form 10-Q]· primary
Reinvestment rate48.0%low
How derived: First-half capital expenditures were $506 million, but Danaher also paid $9.843 billion for acquisitions and added substantial debt, so this case retains 0.48 of after-tax operating profit to cover weaker capital efficiency, integration, working capital, and necessary portfolio investment.
Why this confidence: Reported capital spending and cash flow ↑, Acquisitions occur on an unpredictable cycle ↓, Working-capital requirements are not separately guided ↓
Measured by
- Free cash flow margin, quarterly20.2%derived
Evidence for
- Danaher paid $9.843 billion for acquisitions in the first half of 2026 and financed part of the Masimo acquisition with long-term debt and commercial paper.[Danaher Q2 2026 Form 10-Q]· primary
Evidence against
- First-half free cash flow was $2.350 billion after $506 million of capital expenditures, indicating that the existing operations remain strongly cash generative.[Danaher Q2 2026 results]· primary
Terminal growth2.0%low
How derived: After full-year revenue growth of 0.03 in 2025 and a current core-growth outlook of 0.03-0.04, the bear case fades to 0.02 to reflect mature-market competition, China pricing pressure, and normalization of respiratory demand.
Why this confidence: Demand for recurring consumables ↑, Very long forecast horizon ↓, China pricing and respiratory volatility ↓
Measured by
- Company core sales growth, quarterly3.0%reported
Evidence for
- Diagnostics prices declined 0.015 in both the second quarter and first half of 2026, primarily because of China's volume-based procurement program and sales promotions.[Danaher Q2 2026 Form 10-Q]· primary
Evidence against
- Management expected the company to exit 2026 at a mid-single-digit core-growth rate as end markets recovered and growth initiatives gained traction.[Danaher Q2 2026 results]· primary
Base
low confidence$71.83
IV / share
-66.0% vs $211.03
- Explicit cash flows
- $18.56
- Terminal value
- $82.66
- Net cash
- -$29.39
- Intrinsic value / share
- $71.83
115.1% of the value rests on the terminal value — high dependency. A small change to terminal growth moves the valuation a lot — see terminal growth below.
Revenue growth6.0% → 5.5% → 5.0% → 4.5% → 4.0%medium
How derived: The latest quarter delivered 0.055 reported growth, 0.03 core growth, and 0.045 core growth excluding respiratory testing, so this path assumes end-market recovery, Masimo, and recurring consumables support mid-single-digit growth that gradually moderates.
Why this confidence: Current reported growth and management guidance ↑, Diversified three-segment portfolio ↑, Project timing and respiratory seasonality ↓
Measured by
- Company core sales growth, quarterly3.0%reported
- Biotechnology core sales growth, quarterly2.5%reported
- Life Sciences core sales growth, quarterly5.5%reported
Price implies: 26.2% vs our 5.0% — one of several sets that fit this price
Evidence for
- Second-quarter reported sales grew 0.055, underlying core sales excluding respiratory testing grew 0.045, and management expected mid-single-digit core growth by year-end.[Danaher Q2 2026 results]· primary
Evidence against
- Full-year 2026 core-growth guidance was reduced to 0.03-0.04, and second-quarter Biotechnology core growth slowed to 0.025 because some large customers moved shipment timing out of the quarter.[Danaher Q2 2026 results]· primary
Operating margin21.5%medium
How derived: The quarterly GAAP margin moved from 0.22 in late 2025 to 0.2258 in the first quarter and 0.1799 after Masimo-related charges in the second, so 0.215 represents normalized recovery without assuming full elimination of mix and integration pressure.
Why this confidence: Several comparable quarterly observations ↑, Quantified temporary acquisition charges ↑, Uncertain Masimo integration economics ↓
Measured by
- Biotechnology core sales growth, quarterly2.5%reported
- Life Sciences core sales growth, quarterly5.5%reported
- GAAP operating margin, quarterly18.0%derived
- Free cash flow margin, quarterly20.2%derived
Price implies: 51.1% vs our 21.5% — one of several sets that fit this price
Evidence for
- Fourth-quarter 2025 and first-quarter 2026 GAAP margins were approximately 0.22 and 0.2258, respectively, before the acquisition-related disruption in the latest quarter.[Danaher 2025 and Q1 2026 results]· primary
Evidence against
- Second-quarter 2026 GAAP margin fell to 0.1799, with Masimo-related costs reducing it by 0.0175 and acquired businesses reducing it by another 0.003.[Danaher Q2 2026 Form 10-Q]· primary
Tax rate18.0%high
How derived: The first-half effective rate was 0.179 and management guided to approximately 0.17 for the remainder of 2026, so 0.18 preserves the current geographic tax advantage while allowing for normal discrete charges.
Why this confidence: Reported first-half rate closely matches the assumption ↑, Management provided near-term tax guidance ↑, Discrete charges and multinational tax exposure ↓
No tracked driver measures this assumption yet.
Evidence for
- Danaher's effective tax rate was 0.179 for the first six months of 2026.[Danaher Q2 2026 Form 10-Q]· primary
Evidence against
- Management expected approximately 0.17 for the remainder of 2026, while the second-quarter reported rate was higher at 0.193, showing that discrete items can move the result materially.[Danaher Q2 2026 Form 10-Q]· primary
Reinvestment rate38.0%medium
How derived: First-half free cash flow was $2.350 billion after $506 million of capital spending, so retaining 0.38 of after-tax operating profit balances strong cash conversion against working capital, innovation, instrument placements, integration, and recurring acquisition needs.
Why this confidence: Reported capital expenditure and free-cash-flow data ↑, Strong recurring-consumables economics ↑, Acquisition timing is unpredictable ↓
Measured by
- Free cash flow margin, quarterly20.2%derived
Evidence for
- Danaher states that capital expenditures support manufacturing capacity, customer-leased instruments, new-product development, buildings, replacement equipment, and information systems.[Danaher Q2 2026 Form 10-Q]· primary
Evidence against
- First-half free cash flow reached $2.350 billion and grew 0.09 year over year despite continued internal investment.[Danaher Q2 2026 results]· primary
Terminal growth2.5%low
How derived: With 2025 revenue growth of 0.03 and management expecting a mid-single-digit core-growth exit rate in 2026, 0.025 assumes durable health-care and biologics demand but a mature-company fade below the explicit forecast.
Why this confidence: Recurring life-science and diagnostic demand ↑, Mature global market exposure ↓, Terminal period lies beyond observable guidance ↓
Measured by
- Company core sales growth, quarterly3.0%reported
Evidence for
- Danaher's Biotechnology offerings support recurring research, development, and manufacture of biologic medicines, while management expected the company to exit 2026 at mid-single-digit core growth.[Danaher Q2 2026 Form 10-Q]· primary
Evidence against
- Demand from academic and government customers remained muted, and Diagnostics faced price reductions in China.[Danaher Q2 2026 Form 10-Q]· primary
Bull
low confidence$121.65
IV / share
-42.4% vs $211.03
- Explicit cash flows
- $24.42
- Terminal value
- $126.62
- Net cash
- -$29.39
- Intrinsic value / share
- $121.65
104.1% of the value rests on the terminal value — high dependency. A small change to terminal growth moves the valuation a lot — see terminal growth below.
Revenue growth8.0% → 7.5% → 7.0% → 6.0% → 5.0%low
How derived: Life Sciences core growth reached 0.055, underlying company core growth reached 0.045, bioprocessing orders grew at a mid-teens rate, and Masimo adds acute-care exposure, so this path assumes those leading indicators convert into sustained above-current growth.
Why this confidence: Strong bioprocessing order growth ↑, Recent Life Sciences acceleration ↑, Forecast exceeds current company guidance ↓
Measured by
- Company core sales growth, quarterly3.0%reported
- Biotechnology core sales growth, quarterly2.5%reported
- Life Sciences core sales growth, quarterly5.5%reported
Evidence for
- Life Sciences posted 0.055 second-quarter core growth, bioprocessing orders grew at a mid-teens rate, and Masimo expands Danaher's product offering into acute-care settings.[Danaher Q2 2026 results]· primary
Evidence against
- Company core growth was only 0.03 in the second quarter, Biotechnology core growth was 0.025, and full-year guidance was limited to 0.03-0.04.[Danaher Q2 2026 results]· primary
Operating margin23.5%low
How derived: The first-quarter GAAP margin was 0.2258 and Biotechnology's first-half segment margin reached 0.293, so 0.235 assumes Masimo charges unwind, faster growth improves fixed-cost absorption, and mix shifts toward high-margin bioprocessing.
Why this confidence: High Biotechnology segment profitability ↑, Quantified temporary Masimo charges ↑, Target exceeds recent consolidated GAAP results ↓
Measured by
- Biotechnology core sales growth, quarterly2.5%reported
- Life Sciences core sales growth, quarterly5.5%reported
- GAAP operating margin, quarterly18.0%derived
- Free cash flow margin, quarterly20.2%derived
Evidence for
- Biotechnology's first-half 2026 segment margin rose to 0.293 from 0.281, and management attributed part of the improvement to higher core sales and operating leverage.[Danaher Q2 2026 Form 10-Q]· primary
Evidence against
- Companywide second-quarter GAAP margin was 0.1799, and Diagnostics margin fell to 0.169 because of Masimo-related charges and acquisition dilution.[Danaher Q2 2026 Form 10-Q]· primary
Tax rate17.0%medium
How derived: Management expected an effective rate of approximately 0.17 for the remainder of 2026, so the bull case assumes Danaher's geographic earnings mix, research credits, and foreign-derived income benefits persist.
Why this confidence: Explicit management guidance ↑, Documented structural tax benefits ↑, Recent discrete tax charges ↓
No tracked driver measures this assumption yet.
Evidence for
- Management forecast an effective tax rate of approximately 0.17 for the remainder of 2026 and identified global operations, research credits, and foreign-derived intangible income as reasons the rate remains below the 0.21 U.S. statutory rate.[Danaher Q2 2026 Form 10-Q]· primary
Evidence against
- The actual second-quarter and first-half effective rates were higher at 0.193 and 0.179, respectively.[Danaher Q2 2026 Form 10-Q]· primary
Reinvestment rate30.0%low
How derived: Quarterly free cash flow was $1.265 billion on $6.265 billion of sales despite acquisition disruption, so 0.30 assumes recurring consumables, customer instrument placements, and Danaher Business System productivity allow faster growth without proportionately greater reinvestment.
Why this confidence: Strong reported cash conversion ↑, Recurring consumables mix ↑, High-growth scenario normally requires more capacity and working capital ↓
Measured by
- Free cash flow margin, quarterly20.2%derived
Evidence for
- Second-quarter free cash flow rose 0.155 year over year to $1.265 billion and equaled 1.45 times reported net earnings.[Danaher Q2 2026 results]· primary
Evidence against
- Danaher spent $506 million on property and equipment and $9.843 billion on acquisitions in the first half, while capital spending includes capacity, customer-leased instruments, and product development.[Danaher Q2 2026 Form 10-Q]· primary
Terminal growth3.0%low
How derived: The company grew reported revenue 0.03 in 2025 and expects to exit 2026 at mid-single-digit core growth, so 0.03 assumes enduring biologics, diagnostic-testing, and laboratory demand offset normal maturation.
Why this confidence: Long-duration health-care and biologics demand ↑, Recurring-revenue acquisitions ↑, Terminal growth cannot be supported directly by near-term guidance ↓
Measured by
- Company core sales growth, quarterly3.0%reported
Evidence for
- Danaher's portfolio serves biologic-drug development and manufacturing, clinical diagnostics, and life-science research, while its pending StatLab acquisition has more than 0.85 recurring revenue and expected high-single-digit long-term core growth.[Danaher Q2 2026 results]· primary
Evidence against
- Full-year company core growth guidance was only 0.03-0.04, while respiratory testing is volatile and academic and government demand remained muted.[Danaher Q2 2026 Form 10-Q]· primary
Valuation robustness
reliability of the estimate, not a stock rating52 / 100 · Moderate
Formula v1.0.0. Higher means a more reliable estimate — not a recommendation.
Quality checks
Automated model-risk flags — warnings, not recommendations.
- 115% of the intrinsic value rests on the terminal value — a small change to terminal growth moves the valuation a lot.→ terminal growth
- The terminal growth assumption is low-confidence.→ terminal growth
Per-share economics
Business growth after changes in the diluted share count.
| Period | Revenue growth | FCF/share | FCF/share growth | Shares | Share growth |
|---|---|---|---|---|---|
| Q3 2024 | 3.1% | 1.67 | -5.7% | 729.4M | -2.2% |
| Q1 2025 | -0.9% | 1.46 | -24.4% | 720.8M | -3.7% |
| Q2 2025 | 3.4% | 1.52 | -0.4% | 719.1M | -3.1% |
| Q3 2025 | 4.4% | 1.92 | 15.2% | 713.7M | -2.2% |
| Q1 2026 | 3.7% | 1.53 | 4.3% | 711.2M | -1.3% |
| Q2 2026 | 5.5% | 1.79 | 17.9% | 707.6M | -1.6% |
Valuation history every run
History builds as the valuation is recalculated — this is the first recorded run.
Market inputs researched
The latest available 10-year U.S. Treasury par yield was 0.0413 on 2026-09-04, matching the long duration and U.S.-dollar denomination of the model.
The published five-year monthly regression beta for DHR was 0.81, providing a market-observed measure over a period spanning both pandemic demand and the subsequent normalization.
NYU Stern estimated the trailing-twelve-month adjusted-payout implied U.S. equity risk premium at 0.0418 on 2026-07-01.
DHR's latest completed-session closing price was $207.66 on 2026-09-04.
Generated 9/6/2026, 11:51:04 AM · pipeline v1.2.0