Danaher shares fell Wednesday as Wall Street failed to give the supplier of tools and equipment to drugmakers and hospitals credit for beating its optimistic earnings guidance from earlier this month. Danaher's fourth-quarter 2025 revenue rose 4.6% year over year to $6.84 billion, beating the LSEG-compiled analyst consensus estimate of nearly $6.81 billion. Adjusted earnings per share rose 4.2% to $2.23, also beating LSEG's estimate of $2.15. Why We Own Danaher is a best-in-class diagnostics and life sciences company, with a track record of finding new ways to grow and smartly reorganizing its business portfolio. Danaher products are used to develop and manufacture therapeutic products, as well as to diagnose diseases. With medical spending growing, the healthcare market is an attractive place in the long term. Competitors: Sartorius and Thermo Fisher Scientific Portfolio Weight: 2.35% Most Recent Purchase: September 25, 2025 Started: January 3, 2022 Conclusion Not only do investors appear to be pricing in the pace of the numbers leading up to the announcement at the JPMorgan Healthcare Conference on January 12, they seem concerned about this year's outlook. While full-year core revenue growth guidance was better than expected at the midpoint, segment guidance indicates the lower end of the range is more likely. The top end could come into play if there was an improvement in the life sciences end market; whether more biotech funding leads to more orders and whether things improve in China. Given that EPS guidance is inline-only, we weren't too surprised to see some profit-seekers chiming in on a stock that reported results near a 52-week high. Price action aside, we saw a lot to like. Fourth-quarter organic revenue exceeded expectations, as did the company's overall operating margin. While cash flow results fell short of expectations, the errors were minor, not enough to cause concern given the positive dynamics elsewhere, particularly in Bioprocessing, which is key to management's outlook for the year. Geographically, developed markets' core revenues rose in the low single digits, driven by a mid-single-digit increase in Western Europe (North America was flat), while high-growth markets rose in the mid-single digits, as growth outside China more than offset a low-single-digit decline in China. Bioprocessing, which has been a key source of weakness for Danaher in recent years due to lack of customer financing and reduced inventories, continued to improve. Core revenue increased in high single digits thanks to high single digit growth in consumables and mid single digit growth in equipment. While the quarter was strong and 2026 is shaping up to be better than 2025, progress has been slower than we would like. For now, we reiterate our 2 rating and our $240 per share price target. But as we move forward, we'll think about whether this is a name we really want to be in for the rest of 2026. During Wednesday's morning meeting, Jim Cramer said he's starting to think of Danaher as a “marginal position” in the portfolio, adding that the Club has better stocks that he'd like to own more of. DHR 1Y mountain Danaher 1 year Guidance For the current quarter (Q1 FY2026), management forecasts low single-digit core revenue growth as end-market conditions remain in line with Q4. Management also guided Danaher's adjusted operating margin to be 28.5%. By division, the team expected high-single-digit core revenue growth in biotechnology, low-single-digit decline in life sciences, and low-single-digit decline in diagnostics. Looking at the full year, the team anticipates top-line revenue growth of 3% to 6%, better than the 3.6% the Street was expecting, according to FactSet, as management expects continued improvement in end markets as we work through the year. Adjusted EPS was forecast to be between $8.35 and $8.50, right in line with the LSEG-compiled consensus estimate of $8.42. For the year, core biotech revenue is expected to rise approximately 6% on the back of a single-digit increase in bioprocessing, thanks to continued strength in consumables. Elsewhere, Diagnostics is expected to rise in the single digits as we overcome peak headwinds in China (such as volume-based acquisitions), and Life Sciences is anticipated to be flat for the year. (Jim Cramer's Charitable Trust has a long DHR. See here for a full list of stocks.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. 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