Latest Summer earnings showed that the Top 5 Publicly Traded Life Science tool companies by market cap decreased total revenues -5.22% YOY in the June – August Quarter, According to Latest Earnings Releases.
Of the publicly traded Life Science tool companies who released earnings results, the following top 5 companies decreased revenues -5.22% YOY on average: Thermo Fisher, Danaher, Merck KGaA, Agilent, and West Pharmaceuticals.
West Pharmaceutical stood out with the smallest decrease in revenues at -2.3% followed by Thermo Fisher at -2.6%.
The following sections are covered in this report [Click to Skip Ahead]:
- Biggest Publicly Traded Life Science Tools by Market Share
- Top Life Science Tools Provider by Revenue Growth
- Top Life Science Tools Provider by Earnings (EPS) Growth
Company revenues, earnings, and stock forecasts covered:
- Thermo Fisher (TMO) Stock Forecast
- Danaher (DHR) Stock Forecast
- Merck KGaA (MKKGY) Stock Forecast
- Agilent (A) Stock Forecast
- West Pharmaceutical Services (WST) Stock Forecast
The list below only includes the top 5 Life science tools companies by market capitalization. I will include all >$5B market cap publicly traded life science companies in the next section.
| Company | June 2022 | June 2023 | YOY |
| Thermo Fisher | $10,970 | $10,687 | -2.60% |
| Danaher | $6,528 | $5,912 | -7.40% |
| Merck KGaA | $2,773 | $2,465 | -11.10% |
| Agilent | $1,718 | $1,672 | -2.70% |
| West Pharmaceutical | $771 | $754 | -2.30% |
Thermo Fisher reported a –3% decrease YOY in organic growth in latest Q2, 2023 and cited that the macroeconomic environment was more challenging with economic activity especially in China slowing down.
Danaher saw core revenue decline by -7% YOY, with the reported revenue in their Biotechnology segment declining -17% attributing to their larger customers still working through their inventory they built during the pandemic.
Merck KGaA saw a -4% YOY decrease in organic growth mainly due to destocking and COVID-19 business phasing out slowly as expected.
Agilent reported a -2.3% YOY decrease in core organic growth attributing the decline to slowdown of business in China. Excluding China, revenue growth would be 2%.
West Pharmaceutical Services saw organic sales decline of -2.5% with the continued drop in COVID-19 sales contributing to the decline. However, their Biologics market grew double digits with stable demand.
Key Takeaway
The recurring theme in all the declines in revenue among the life science companies mentioned is the deceleration of demand from China and the continued drop in demand for COVID-19 related sales as it eases into endemic status from pandemic.
Organic growth also slowed down among the companies as large customers continue their destocking process of working through their existing inventories which was built up from the pulled through demand of the recent pandemic.
Biggest Publicly Traded Life Science Tools by Market Share
The below chart shows the list of publicly traded life science tools providers with meaningful market caps of >$5B as of August 2023.
Leading the group is Thermo Fisher with roughly 46.5% market share followed by Danaher excluding Veralto with 27.2% and trailing behind is Avantor with 7.7% of Trailing Twelve Months (TTM) revenue share of all publicly traded life science tools providers.
| Company | Revenues (TTM in Thousands) | Mkt Share |
| Thermo Fisher | $43,524,000 | 46.5% |
| Danaher ex VLTO | $25,450,000 | 27.2% |
| Avantor | $7,175,700 | 7.7% |
| Agilent Technologies | $6,994,000 | 7.5% |
| Sartorius Stedim Biotech S.A. | $3,317,496 | 3.5% |
| West Pharmaceutical Services | $2,886,000 | 3.1% |
| Merck KGaA ex other segments | $2,465,000 | 2.6% |
| Stevanato Group | $1,080,918 | 1.2% |
| Repligen Corp | $729,332 | 0.7% |
Top Life Science Tools Provider by Revenue Growth
In the previous three fiscal years, Repligen Corp. lead ahead among its peers in the life science tools industry with it’s 34.10% CAGR.
Merck KGaA on the other hand is leading in boosting its year-over-year annual revenue growth in its Life Science segment, growing revenue 15.40% from 2021-2022.
Sartorius Stedim Biotech S.A. takes the number two spot in 3yr CAGR with 25.59% while the other two large Life Science companies, Thermo Fisher and Danaher ex VLTO trail behind with 18.36% and 14.00% 3yr CAGR respectively.
| Company | 3yr CAGR | 1yr CAGR YOY |
| Repligen Corp | 34.10% | -6.35% |
| Sartorius Stedim Biotech S.A. | 25.59% | -2.74% |
| Stevanato Group | 22.39% | 15.36% |
| Thermo Fisher | 18.36% | 1.64% |
| Danaher ex Veralto | 14.00% | 7.42% |
| West Pharmaceutical Services | 13.79% | -2.14% |
| Merck KGaA ex other segments | 11.37% | 15.40% |
| Agilent Technologies | 10.22% | 5.03% |
| Avantor | 6.00% | -5.62% |
Key Takeaway
The past three fiscal years have been a boom for the life science tools industry with the COVID-19 pandemic tailwind pushing earnings to higher CAGR levels with notable ones like Repligen Corp and Sartorius Stedim Biotech S.A.
Another interesting note in the given data is that the leading companies in 3yr CAGRs are all smaller in size compared to the big ones, showing that scaling is easier with a smaller base.
Top Life Science Tools Provider by Earnings (EPS) Growth
In the last three fiscal years, Repligen Corp saw the highest 3 year annual compounded growth rate of 59.59% in earnings per share.
All publicly traded life science tool providers in the graph below recorded high double digit EPS growth with the top 3 seeing their three year annual EPS growth rates of almost 40%+.
Among the list, Stevanato Group had the highest 1-year EPS YOY growth rate of 20.96%.
The highest 3-year EPS CAGR companies in the list include Stevanato Group at 49.50%, Avantor at 39.15%, and Sartorius Stedim Biotech S.A. at 35.69%.
| Company | 3yr EPS CAGR | 1yr EPS YOY Growth |
| Repligen Corp | 59.59% | -12.28% |
| Stevanato Group | 49.50% | 20.96% |
| Avantor | 39.15% | -32.59% |
| Sartorius Stedim Biotech S.A. | 35.69% | 1.78% |
| Merck KGaA | 29.48% | -7.05% |
| Danaher | 29.06% | 0.26% |
| West Pharmaceutical Services | 21.91% | -23.44% |
| Agilent Technologies | 19.97% | -12.84% |
| Thermo Fisher | 16.58% | -22.09% |
Key Takeaway
The data shown above reflects the COVID-19 tailwind that has pushed the earnings of all the life science tools companies in the list while the 1-year EPS YOY growth shows the slowdown of pandemic-related sales and boils down the players who have a more robust mix of sales in their business portfolios.
Life Science Tools Companies Revenue, Earnings and Stock Forecast (Quarter ending June 2023)
| Company | YOY EPS Forecast |
| Thermo Fisher | -3.54% |
| Danaher | -21.40% |
| Merck KGaA | -42.91% |
| Agilent Technologies | 3.75% |
| West Pharmaceutical Services | -8.54% |
Thermo Fisher (TMO) Revenue, Earnings, and Stock Forecast
Thermo Fisher’s revenue over the latest Trailing Twelve Month period was $43.5 billion. Thermo Fisher’s earnings (Net Income) over the latest Trailing Twelve Month period was $5.7 billion.
The Wall Street consensus for Thermo Fisher’s EPS (earnings per share) projection for this fiscal year 2023 is $22.42. The company’s TTM (trailing twelve months) Earnings Per Share was $14.7 as of the quarter ending June 30, 2022.
Thermo Fisher is expected to see a contraction in earnings per share of -3.54% YOY in the next quarter based on the consensus of stock market analyst forecasts.
Danaher (DHR) Revenue, Earnings, and Stock Forecast
Danaher’s revenue over the latest Trailing Twelve Month period was $30.4 billion. Danaher’s earnings (Net Income) over the latest Trailing Twelve Month period was $6.4 billion.
The Wall Street consensus for Danaher’s EPS (earnings per share) projection for this fiscal year 2023 is $8.61. The company’s TTM (trailing twelve months) Earnings Per Share was $8.6 as of the quarter ending June 30, 2022.
Danaher is expected to see a contraction in earnings per share of -21.40% YOY in the next quarter based on the consensus of stock market analyst forecasts.
Merck KGaA (MKKGY) Revenue, Earnings, and Stock Forecast
Merck KGaA’s revenue over the latest Trailing Twelve Month period was $24.1 billion. Merck KGaA’s earnings (Net Income) over the latest Trailing Twelve Month period was $3.4 billion.
The Wall Street consensus for Merck KGaA’s EPS (earnings per share) projection for this fiscal year 2023 is $1.54. The company’s TTM (trailing twelve months) Earnings Per Share was $7.7 as of the quarter ending June 30, 2022.
Merck KGaA is expected to see a contraction in earnings per share of -42.91% YOY in the next quarter based on the consensus of stock market analyst forecasts.
Agilent Technologies (A) Revenue, Earnings, and Stock Forecast
Agilent’s revenue over the latest Trailing Twelve Month period was $7.0 billion. Agilent’s earnings (Net Income) over the latest Trailing Twelve Month period was $1.4 billion.
The Wall Street consensus for Agilent’s EPS (earnings per share) projection for this fiscal year 2023 is $5.42. The company’s TTM (trailing twelve months) Earnings Per Share was $4.5 as of the quarter ending June 30, 2022.
Agilent is expected to see a slight expansion in earnings per share of 3.75% YOY in the next quarter based on the consensus of stock market analyst forecasts.
West Pharmaceutical Services (WST) Revenue, Earnings, and Stock Forecast
West Pharmaceutical Services’ revenue over the latest Trailing Twelve Month period was $2.9 billion. West Pharmaceutical Services’ earnings (Net Income) over the latest Trailing Twelve Month period was $0.5 billion.
The Wall Street consensus for West Pharmaceutical Services’ EPS (earnings per share) projection for this fiscal year 2023 is $7.85. The company’s TTM (trailing twelve months) Earnings Per Share was $7.0 as of the quarter ending June 30, 2022.
West Pharmaceutical Services is expected to see a contraction in earnings per share of -8.54% YOY in the next quarter based on the consensus of stock market analyst forecasts.
Methodology
All data mentioned here in this article was sourced from publicly available filings and releases, and processed by investment newsletter provider Sather Research, LLC.
Stock forecasts and analyst consensus EPS growth estimates were sourced from data provided by Seeking Alpha.
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