Will Strength in Biotechnology Unit Continue to Drive Danaher's Growth?

Danaher Corporation DHR has been benefiting from strength in its Biotechnology segment. In the third quarter of 2025, the segment’s core revenues increased 6.5% on a year-over-year basis, supported by sustained momentum in the bioprocessing business.

A surge in demand for consumables from large pharmaceutical customers has been aiding the performance of the Biotechnology segment. Also, solid demand from pharmaceutical customers for monoclonal antibodies (mAbs) has been buoying the bioprocessing business. In the third quarter of 2025, orders in the bioprocessing business increased for the ninth consecutive quarter. For 2025, the company anticipates core revenues from the bioprocessing business to increase in high single-digits on a year-over-year basis. 

Also, solid momentum in the discovery and medical business, driven by an increase in demand for medical and lab filtration consumables, bodes well for the Biotechnology segment. Core sales from the discovery and medical business increased in the low single digits in the third quarter.

However, lower demand for protein research equipment in the life science research end markets is concerning for the Biotechnology segment. Declining demand for equipment is also acting as a headwind for it.

Despite these challenges, for the fourth quarter of 2025, Danaher anticipates core revenues from the Biotechnology segment to increase approximately 5% on a year-over-year basis. The recurring demand for products in the bioprocessing, and discovery and medical businesses positions the segment to deliver steady performance in the quarters ahead.

Segment Snapshot of DHR's Peers

Among its major peers, CVS Health Corporation’s CVS Health Services segment reported net sales of $49.3 billion in the third quarter of 2025, up 11.6% year over year. CVS Health generated 47.9% of its total sales from this segment in the quarter. Favorable pharmacy drug mix and brand inflation aided the segment’s results in the second quarter.

Labcorp Holdings Inc.’s LH Biopharma Laboratory Services segment generated net sales of $799.1 million in the third quarter of 2025, up 8.3% year over year. This was driven by Labcorp’s strong drug development capabilities and scientific expertise. Labcorp derived 22.4% of its total revenues from this segment during the quarter.

DHR's Price Performance, Valuation and Estimates

Shares of Danaher have gained 14.5% in the past six months compared with the industry’s growth of 6.3%.

From a valuation standpoint, DHR is trading at a forward price-to-earnings ratio of 26.69X, above the industry’s average of 16.26X.

The Zacks Consensus Estimate for DHR’s 2025 earnings has remained steady over the past 30 days.

The company currently carries a Zacks Rank #4 (Sell). 

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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