UBS Downgrades Thermo Fisher Scientific to Neutral on Life Sciences R&D Headwinds

UBS downgraded Thermo Fisher Scientific to neutral from buy, citing headwinds in life sciences R&D spend. The bank cut its price target to $460 from $500, representing an 8% upside from the July 10 close.

UBS has downgraded Thermo Fisher Scientific (NYSE:TMO) to neutral from buy, citing headwinds in life sciences R&D spend. The bank has cut its price target to $460 from $500, representing an 8% upside from the July 10 close [1].

The downgrade comes as UBS adjusts its outlook on the company's stock performance, reflecting a series of challenges that could negatively impact life sciences R&D spend. The bank's new price target of $460 is a significant reduction from the previous estimate of $500 [2].

Analysts have provided a range of price targets for TMO, with the average target price at $551.12, implying an average upside of 29.32% from the current price of $426.17. Despite the UBS downgrade, the consensus recommendation from brokerage firms remains "Outperform" [2].

In its Q1 2025 earnings report, Thermo Fisher Scientific reported strong financial performance, with revenue of $10.36 billion and adjusted EPS growth of 1% to $5.15 per share. The company also launched several innovative products and executed its capital deployment strategy, including a $4.1 billion acquisition agreement and $2 billion in share repurchases [2].

However, the company faced revenue declines in the Academic and Government segment due to macroeconomic conditions in the US and China. Additionally, the company anticipates a $400 million revenue headwind due to US-China tariffs and a $500 million reduction in revenue expectations due to policy changes impacting US Academic and Government customers and clinical trials related to vaccines [2].

UBS's downgrade reflects the company's updated guidance to reflect macroeconomic uncertainties, which are expected to impact revenue and adjusted EPS. The bank's new price target of $460 is a significant reduction from the previous estimate of $500, highlighting the potential challenges ahead for Thermo Fisher Scientific [1].

References:
[1] https://seekingalpha.com/news/4466262-thermo-fisher-scientific-downgraded-ubs-life-sciences-r-and-d-headwinds
[2] https://www.gurufocus.com/news/2965053/thermo-fisher-tmo-receives-downgrade-from-ubs-with-reduced-price-target-tmo-stock-news