Thermo Fisher Scientific Inc. (TMO): A Bull Case Theory

We came across a bullish thesis on Thermo Fisher Scientific Inc. on Rijnberk InvestInsights’s Substack by Daan | InvestInsights. In this article, we will summarize the bulls’ thesis on TMO. Thermo Fisher Scientific Inc.'s share was trading at $484.96 as of July 28^th. TMO’s trailing and forward P/E were 28.03  and 21.64, respectively according to Yahoo Finance.

Thermo Fisher (TMO) posted Q2 results that modestly beat expectations, prompting management to raise full-year 2025 guidance and sparking an 11% share price jump, largely driven by renewed investor confidence rather than the headline numbers. For much of 2025, TMO shares had been weighed down by post-COVID growth headwinds, tariff concerns, and fears over research grant cuts—issues that proved overstated given that COVID-related revenue is nearly gone, tariff impact is muted, and grant exposure represents less than 5% of business.

TMO remains a dominant supplier of life sciences and pharmaceutical equipment, enjoying a deep moat and sticky, recurring consumables revenue that accounts for 83% of sales. Q2 revenue rose 3% year-over-year to $10.85 billion, supported by pharma and biotech demand and strong execution despite ongoing headwinds in academia, government, and China.

EPS of $5.36 topped guidance, with tariff impacts less severe than expected and operational efficiencies offsetting cost pressures. Management lifted FY25 operating margin guidance to 22.5–22.7% and EPS to $22.22–$22.84, with FCF expected at $7–$7.4 billion. Optimism is bolstered by cost-saving initiatives, expected margin expansion of 50–70 bps annually, and accelerating organic growth in 2026–2027, with long-term growth drivers firmly intact.

TMO’s disciplined M&A, including deals with Solventum and Sanofi, further strengthens its market position. At $475, shares trade at 21x earnings—below historical averages—offering a fair risk/reward with potential 10.5% annualized returns to a 2027 target price of $607. While not as deeply discounted as earlier in 2025, TMO remains a high-quality, resilient compounder poised for durable long-term growth.

Previously, we covered a bullish thesis on Thermo Fisher Scientific Inc. (TMO) by FluentInQuality in March 2025, highlighting its strong recurring consumables revenue, dominant market position, and consistent capital efficiency. The stock has depreciated about 7.4% since, as macro concerns weighed on sentiment. The thesis holds, and Daan | InvestInsights shares a similar view, emphasizing renewed confidence after Q2 results and improved guidance.

Thermo Fisher Scientific Inc. is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 101 hedge fund portfolios held TMO at the end of the first quarter which was 100 in the previous quarter. While we acknowledge the potential of TMO as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

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Disclosure: None.