What Happened?
Shares of life sciences company Thermo Fisher (NYSE: TMO) jumped 12.3% in the afternoon session after the company reported second-quarter earnings and revenue that surpassed Wall Street estimates and raised its full-year financial guidance. The company posted adjusted earnings per share (EPS) of $5.36 on revenue of $10.85 billion. These results topped the average analyst estimates, which had projected an EPS of $5.22 on revenue of $10.65 billion. EPS is a widely used metric of a company's profitability. Following the strong quarterly performance, Thermo Fisher lifted its outlook for the full year. The company now expected 2025 revenue to be between $43.6 billion and $44.2 billion, raising the lower end of its previous forecast. It also increased its adjusted EPS guidance to a range of $22.22 to $22.84. The better-than-expected results were driven by growth in its Life Sciences Solutions and Lab Products & Biopharma Services divisions.
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What Is The Market Telling Us
Thermo Fisher’s shares are not very volatile and have only had 7 moves greater than 5% over the last year. Moves this big are rare for Thermo Fisher and indicate this news significantly impacted the market’s perception of the business.
The previous big move we wrote about was 5 days ago when the stock dropped 3% as several negative developments weighed on the sector. Weakness in managed care providers was a significant factor, with companies like Elevance Health and Humana seeing declines due to an analyst downgrade and a lost lawsuit regarding Medicare bonus payments, respectively.
Additionally, some pharmaceutical and biotech companies experienced sharp drops following unfavorable news; for instance, Sarepta Therapeutics plunged after a report indicated another patient death tied to its experimental gene therapy, and GSK's blood cancer drug dosage was voted against by the FDA advisory committee. Broader market sentiment, including concerns about rising costs and inadequate pricing for 2025 plans among health insurers, also contributed to the downward pressure on healthcare equities.
Thermo Fisher is down 9.4% since the beginning of the year, and at $473.38 per share, it is trading 24.2% below its 52-week high of $624.21 from September 2024. Investors who bought $1,000 worth of Thermo Fisher’s shares 5 years ago would now be looking at an investment worth $1,153.
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