Analyst Dane Leone says Danaher Corporation (DHR) is becoming much more of a health care-centric company today and over the next 12 months.
“The management team at Danaher has made some very interesting acquisitions, with the most recent one being Pall Corporation that provides filtration equipment for the biopharmaceuticals industry,” Leone says.
“It will be resetting the clock on its business model of M&A in 2016 with the split of the company from the new Danaher to new company as yet to be named,” Leone adds. “The new Danaher will house most of the health care assets and be a very growth company looking to continue to broaden itself out and deepen some of the verticals in life sciences and diagnostics.”
On a multiple basis, Leone expects to see low teens for EBITDA, whereas the group trades in the midteens. He says he expects a high-single-digit EBITDA growth profile that is sustainable over the next several years to help to support that valuation argument.
“We think Danaher is one of the more interesting names,” he says. “It’s been underowned on the traditional health care side, somewhat as a function of its industrial history, but we see that changing over the next 12 months.”
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