Is This the Right Time to Hold Thermo Fisher Stock in Your Portfolio?

Thermo Fisher Scientific Inc.’s TMO recent slew of strategic acquisitions reflects its ongoing commitment to sustainable long-term growth. End markets play an important role as well, bolstering the company’s top line. Meanwhile, the adverse impacts of foreign exchange and fierce competitive pressure raise concerns for Thermo Fisher’s operations.

In the past year, this Zacks Rank #3 (Hold) stock has lost 2.4% compared with the industry’s 4.3% decline. The S&P 500 composite has gained 21.9% in the said period.

The renowned medical and laboratory equipment provider has a market capitalization of $192.62 billion. TMO has an earnings yield of 4.8% compared with the industry’s negative 0.7%. The company’s earnings surpassed estimates in each of the trailing four quarters, delivering an average surprise of 2.8%.

Let’s delve deeper.

Upsides for TMO Stock

Strength in End Markets: Within the pharma and biotech end market, Thermo Fisher’s biosciences and bioproduction businesses recently expanded capacity significantly to meet global vaccine manufacturing requirements. In the fourth quarter of 2025, the Pharma and Biotech segment delivered high single-digit growth, driven by strength in the bioproduction business and the research and safety market channel.

For full-year 2025, growth in the Industrial and Applied end market was supported by strong performance in the research and safety market channel, as well as continued momentum in the electron microscopy business. Meanwhile, within the Diagnostics and Healthcare end market, the company reported strong growth in its Specialty Diagnostics businesses. For the full year, growth in this end market was flat overall, with solid contributions from the transplant diagnostics and immunodiagnostics businesses.

Strategic Acquisitions to Boost Growth: Thermo Fisher’s business strategy primarily includes expansion through strategic acquisition of technologies and businesses that augment its existing products and services. During 2025, the company deployed approximately $16.5 billion, including committing $13 billion to M&A. Thermo Fisher expects to deliver $125 million in adjusted operating income synergies in the next five years, driven by revenue synergies and cost efficiencies.

In October 2025, Thermo Fisher entered into a definitive agreement to acquire Clario Holdings, Inc., a leading provider of endpoint data solutions for clinical trials, for $8.875 billion in cash at close. The acquisition deal is expected to be accretive to adjusted EPS by approximately $0.45 in the first 12 months of ownership. This further strengthens Thermo Fisher’s position as the trusted partner to pharma and biotech customers. In September 2025, the company completed the $4.1 billion acquisition of Solventum’s Purification & Filtration business, now part of the Life Sciences Solutions segment. 

What Ails Thermo Fisher?

Exposure to Foreign Currency: International markets contribute a substantial portion of Thermo Fisher’s revenues. The company intends to continue expanding its presence in these regions. International revenues and costs are subject to the risk that fluctuations in exchange rates could adversely affect a company’s reported revenues and profitability when translated into U.S. dollars for financial reporting purposes. 

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As Thermo Fisher’s international sales grow, exposure to fluctuations in currency exchange rates could have a larger effect on its financial results. While foreign exchange provided a 1% year-over-year benefit to sales in the fourth quarter of 2025, any reversal in currency trends could immediately pressure reported growth going forward.

Tough Competitive Pressure: On account of its diversified portfolio, Thermo Fisher faces different types of competitors, including a broad range of manufacturers and third-party distributors. The competitive landscape is quite tough with changing technology and customer demands that require continuing research and development.

TMO Stock Estimate Trend

The Zacks Consensus Estimate for 2026 earnings per share (EPS) has remained unchanged at $24.66 in the past 30 days.

The Zacks Consensus Estimate for the company’s 2026 revenues is pegged at $46.75 billion, indicating a 4.9% rise from the year-ago reported number.

Key Picks

Some better-ranked stocks in the broader medical space are Phibro Animal Health PAHC, Envista NVST and Align Technology ALGN.

Phibro Animal Health has an earnings yield of 5.5%, well ahead of the industry’s 2.5%. Its earnings surpassed the Zacks Consensus Estimate in each of the trailing four quarters, with the average surprise being 20.2%. The company’s shares have surged 117.5% against the industry’s 15.1% decline in the past year.

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

Envista, sporting a Zacks Rank #1, has an earnings yield of 4.8% compared with the industry’s 2.5%. Shares of the company have rallied 54% against the industry’s 15.1% decline. NVST’s earnings surpassed estimates in each of the trailing four quarters, with the average surprise being 16.4%.

Align Technology, carrying a Zacks Rank #2 (Buy) at present, has an estimated long-term earnings growth rate of 10.1% compared with the industry’s 9.1% rise. Shares of the company have rallied 7.5% compared with the industry’s 22% growth. ALGN’s earnings beat estimates in three of the trailing four quarters and missed on one occasion, with the average surprise being 6.2%.

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

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