Dan Loeb Adjusts Healthcare Holdings: Danaher Stake Trimmed As Thermo Fisher Gains Favor

In the latest quarter, renowned investor Daniel Loeb, founder of Third Point LLC, made significant adjustments to his healthcare holdings. Loeb reduced his stake in Danaher Corporation (DHR) and increased his position in Thermo Fisher Scientific Inc (TMO), reflecting his strategic approach to the sector. This article explores the factors behind Loeb's decisions and the long-term growth prospects of both companies.

Danaher Corporation (DHR) Stake Trimmed

Loeb reduced his stake in Danaher Corporation (DHR) by around 2.5% in the fourth quarter of 2024, from 1,950,000 shares to 1,900,000 shares. This decision came after Danaher reported weaker-than-expected fourth-quarter earnings in January 2025. The company's adjusted earnings per share of $2.14 missed the street view of $2.16, and sales of $6.54 billion (+2%) beat the analyst consensus estimate of $6.42 billion. Following the earnings release, several analysts cut their price forecasts on Danaher's stock. Barclays analyst Luke Sergott lowered the price forecast from $275 to $240, and Wells Fargo analyst Brandon Couillard curtailing the price target from $280 to $240, both maintaining an Equal-Weight rating.

Loeb's reduction in shares suggests he may have been concerned about Danaher's earnings performance and the subsequent analyst revisions. Additionally, Danaher expects its non-GAAP core revenue to decline by a low-single digit percentage year-over-year in the first quarter, which might have influenced Loeb's decision to reduce his position.



Thermo Fisher Scientific Inc (TMO) Stake Increased

Loeb acquired a stake in Thermo Fisher by attaining 350,000 shares in the fourth quarter of 2024. This move came after Thermo Fisher reported strong fourth-quarter earnings, with adjusted earnings per share of $6.10 beating the street view of $5.94 and sales of $11.395 billion (+5% year over year) outpacing the analyst consensus estimate of $11.277 billion. Following the earnings release, several analysts raised their price forecasts on Thermo Fisher's stock. Morgan Stanley analyst Tejas Savant increased the price target from $647 to $678, and Wells Fargo analyst Brandon Couillard upped the price forecast from $660 to $680.

Loeb's acquisition of shares in Thermo Fisher indicates that he was likely attracted to the company's strong earnings performance and the positive analyst revisions that followed. Additionally, Thermo Fisher inked a 10-year VPPA with X-ELIO to enhance renewable energy access in pharmaceutical and healthcare supply chains through the Lorca solar project, set to launch in early 2026 with three industry partners. This initiative might have appealed to Loeb, as it demonstrates Thermo Fisher's commitment to sustainability and innovation.



Long-term Growth Prospects

Thermo Fisher Scientific Inc has shown stronger long-term growth prospects compared to Danaher Corporation in recent quarters. While both companies have their strengths, Thermo Fisher's recent earnings performance, analyst revisions, and commitment to renewable energy initiatives make it an attractive investment option for Loeb and other investors.

In conclusion, Daniel Loeb's investment decisions in Danaher and Thermo Fisher were influenced by their recent earnings reports and the subsequent analyst revisions. Loeb reduced his stake in Danaher following its weaker-than-expected earnings and the subsequent analyst downgrades, while acquiring a stake in Thermo Fisher after its strong earnings performance and the positive analyst revisions. Thermo Fisher's commitment to renewable energy initiatives and strong long-term growth prospects make it an attractive investment option for Loeb and other investors seeking steady, though not spectacular, growth as they earn steady income from dividends.