Danaher has been on a rollercoaster ride on the stock market in recent years. Now there are increasing signs that the company is on the verge of a new upswing.
The classic stock market cycle
Danaher is a prime example of typical long-term stock market cycles. Börse.
If companies do well for years, investor confidence continues to grow. The share price rises faster than profits and the valuation increases accordingly.
In the case of Danaher, this has led to the P/E rising from around 11 to almost 40 within ten years.
The story reached its temporary climax in 2021, when increased demand in the healthcare sector led to a jump in profits.
This was followed by a phase of lower demand, a fall in profits and a significant slump in the share price.
Business seems to have bottomed out in the meantime, but the share is trading at a multi-year low.
And so the circle closes. The share has gone through a complete boom and bust cycle: Beginning with a low valuation, disproportionately rising prices that have led to a clear overvaluation and a price collapse that has ultimately led to a moderate valuation again.
A special strategy
Danaher is one of the world's largest conglomerates and is highly diversified. However, its main business lies in the development, manufacture and marketing of industrial, healthcare and consumer products.
The Group strategy is largely shaped by the Rales brothers, who are legendary in investor circles.
The company relies on targeted investments and acquisitions to generate growth.
Danaher has repeatedly succeeded in finding very lucrative targets and reinvesting the free funds with a high return.
As a rule, the company buys much smaller companies that are among the dominant players in their respective sectors.
At its core, Danaher is a specialist in takeovers. New subsidiaries are integrated and streamlined and their cash flow finances the next acquisitions in the long term.
This is how the wheel keeps turning.
It sounds so simple, but in reality it is not. Most acquisitions do not create added value.
Danaher is one of the few specialists for acquisitions that have demonstrably created added value.
The next coup
The next coup was announced on February 17. A definitive agreement was reached for the acquisition of Masimo for USD 9.9 billion. This is one of the leading specialist providers of pulse oximetry and other patient monitoring solutions, primarily in the acute care sector.
This is Danaher's largest transaction since the USD 5.7 billion acquisition of antibody specialist Abcam in 2023.
Masimo will operate as an independent company within Danaher's Diagnostics segment - together with Radiometer, Leica Biosystems, Cepheid and Beckman Coulter Diagnostics.
Danaher is thus expanding its diagnostics and life sciences portfolio to include patient monitoring and related acute care technologies.
As is customary at Danaher, the deal is cleverly structured and is expected to increase net income by USD 0.15 - 0.20 per share in the first year. In the medium term, it is expected to reach USD 0.70 per share, partly due to expected synergy effects of more than USD 125 million.
The transaction is expected to be completed in the second half of 2026.
The valley could be over
There are also increasing signs that the slump in the healthcare industry has finally come to an end and that momentum is picking up again at Group level.
At USD 2.06 per share, earnings in the first quarter were well above expectations of USD 1.95. With sales of USD 5.95 billion, analysts' estimates were met.
For the year as a whole, this corresponds to a 4% increase in sales and a 10% jump in profits.
Danaher expects a sequential improvement in business over the course of the year, but is still cautious in its forecast.
Danaher is forecasting organic sales growth of 3 - 6 % for the financial year. Earnings expectations have been raised from USD 8.35 - 8.50 to USD 8.35 - 8.55 per share.
At the upper end, this would correspond to a 10% jump in earnings. Danaher therefore has a forward P/E of 22.7.
The share was last valued lower in 2018. Over the long term, the P/E has hovered around 27.7.
Danaher share: Chart from 22.04.2026, price: USD 194.54 - symbol: DHR | source: TWS
The share has returned to the central support of recent years and bounced off it. If it now manages to rise above USD 200, there will be a procyclical upward trend Kaufsignal with possible price targets at USD 212 and USD 220.
If, on the other hand, the share falls below USD 188, further price losses to USD 181 or 175 must be expected. Below this level, the chart picture would become permanently gloomier
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