Here’s Why Danaher Stock May Continue To Rise In The Near Term

The stock price of Danaher, a conglomerate with products in environmental, life sciences, and diagnostics fields, has seen a 10% rise over the last twenty-one trading days, while it is up 47% over the last year, driven by positive developments for the company. Last month, Danaher announced its plan to acquire Aldevron, which manufactures plasmid DNA, mRNA, and proteins for biotechnology and pharmaceutical customers, for $9.6 billion. [1]

This move appears to be positive for the company. Note that Cepheid, a molecular diagnostic company owned by Danaher, received the U.S. FDA’s emergency use authorization for its rapid test of Covid-19 last year, and it has helped the company post growth in Cepheid’s GeneXpert instruments installed base. However, with a growth in Covid-19 vaccination rates, there were concerns of falling diagnostics revenue for Danaher. With Aldevron, Danaher has now entered into the contract manufacturing business, which has seen a significant demand during the pandemic, and it will bolster the bottom-line expansion, after the testing sales see a slowdown.

However, now that DHR stock has seen a rise of 10% in twenty-one trading days, will it continue its upward trajectory, or is a fall imminent? Going by historical performance, there is a higher chance of a rise in DHR stock over the next month. Out of 153 instances in the last ten years that DHR stock saw a twenty-one day rise of 10% or more, 93 of them resulted in DHR stock rising over the subsequent one month period (twenty-one trading days). This historical pattern reflects 93 out of 153, or about 61% chance of a rise in DHR stock over the coming month. See our analysis on Danaher Stock Chances of A Rise for more details.

Calculation of ‘Event Probability‘ and ‘Chance of Rise‘ using last ten years data

  1. After moving 2.1% or more over a five-day period, the stock rose in the next five days on 54% of the occasions.
  2. After moving 3.5% or more over a ten-day period, the stock rose in the next ten days on 64% of the occasions
  3. After moving 10.0% or more over a twenty-one-day period, the stock rose in the next twenty-one days on 61% of the occasions.

Predict average return on Danaher (DHR) Stock Return: AI Predicts DHR Average and Excess Return After a Fall or Rise Danaher

(DHR) Stock Return (Recent) Comparison With Peers

  1. Five-Day Return: DHR highest at 2.1%; GLW lowest at -3.9%
  2. Ten-Day Return: DHR highest at 3.5%; GLW lowest at -4.5%
  3. Twenty-One Days Return: DHR highest at 10%; GLW lowest at 0.03%

While DHR stock may see higher levels, 2020 has created many pricing discontinuities which can offer attractive trading opportunities. For example, you’ll be surprised how counter-intuitive the stock valuation is for Heico vs Thermo Fisher Scientific.

See all Trefis Price Estimates and Download Trefis Data here

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