US Equities Analysis

DHR — Danaher Corporation

Research evidence pack

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2. Company Fundamentals

2.1 Competitiveness

Metric Value
Operating Margins 22.94%
Profit Margins 14.89%
Return on Equity 7.08%
Return on Assets 4.19%
Free Float 0.63B
Dividend Yield 0.82%
Short Int % Utilisation 1.47%

2.2 Growth

Metric Value
Revenue Growth 3.7%
Free Cash Flow 4.57B
EBITDA 18.14 (Ratio)
Enterprise Value 143.96B
EV/Revenue 5.81
EV/EBITDA 18.14

Revenue growth of 3.7% suggests mature or challenged top-line momentum.

2.3 Management

Role Metric
Consensus Rating N/A

2.4 Return

Metric Value
Expected Return (Ann.)* 1.47%
Risk / Std Dev (Ann.)* 31.19%
1-Year Price Return* -3.31%

Latest Market Data (as of 2026-08-14, US Eastern time):

Metric Value
Last Price $202.45
52-Week Range $160.93 – $242.80
Observation Count 251 trading days

The return and risk statistics use daily adjusted closes from the retrieved one-year series and annualise daily moments using 252 trading days. The last price is the latest regular-market price reported for the stated date. Source: Yahoo Finance market data.

2.5 FCFF DCF Valuation

Valuation basis: This research model follows a five-year, unlevered FCFF DCF. It starts from reported annual operating inputs, forecasts revenue and operating cash conversion under an explicit mechanical policy, discounts FCFF at WACC, applies a Gordon-growth terminal value, and bridges enterprise value to an indicative common-equity value per share. It is an analytical estimate rather than a recommendation or personalised target price.

Step 1 — Forecast Operating Profit and NOPAT

Reported operating input Value
Revenue $24.57B
Prior annual revenue $23.88B
EBIT $4.50B
Tax rate 15.00%
NOPAT = EBIT × (1 − tax rate) $3.82B
Forecast start-growth basis 2.90%
Forecast policy latest reported annual revenue growth, bounded to -10.00% / 15.00%

Step 2 — Calculate FCFF

Current FCFF building block Value
NOPAT $3.82B
Add: depreciation & amortisation $2.45B
Less: capital expenditure -$1.16B
Less/(add): working-capital cash-flow movement -$719.00M
Current unlevered FCFF $4.40B

Explicit FCFF forecast

Forecast year Revenue growth NOPAT D&A Capex Change in NWC FCFF Present value
1 2.90% $3.93B $2.52B -$1.19B -$739.87M $4.52B $4.35B
2 2.80% $4.04B $2.59B -$1.56B -$760.60M $4.31B $3.83B
3 2.70% $4.15B $2.66B -$1.96B -$781.15M $4.07B $3.35B
4 2.60% $4.26B $2.73B -$2.37B -$801.46M $3.82B $2.91B
5 2.50% $4.37B $2.80B -$2.80B -$821.50M $3.55B $2.50B

Step 3 — Determine the Discount Rate (WACC)

WACC input Value
Risk-free rate 4.71%
Equity risk premium assumption 5.50%
Beta 0.80
Cost of equity 9.09%
Pre-tax cost of debt 1.44%
WACC 8.13%
WACC validation within standard range

Step 4 — Estimate Terminal Value

Terminal-value input Value
Perpetuity growth rate 2.50%
Terminal value $64.61B
Implied terminal EV / EBITDA 8.14x
Terminal value as % of enterprise value 72.08%

Step 5 — Discount Cash Flows to Enterprise Value

Enterprise-value component Value
Present value of explicit FCFF $16.93B
Present value of terminal value $43.71B
Indicated enterprise value $60.65B
Discounting convention mid-year for explicit FCFF; terminal value discounted at year-end five

Step 6 — Convert Enterprise Value to Equity Value

Equity bridge Value
Indicated enterprise value $60.65B
Less: gross interest-bearing debt $19.70B
Add: cash and equivalents $4.62B
Add: affiliate investments $0.00
Less: minority interests $7.00M
Indicated common equity value $45.56B

Step 7 — Calculate Indicative Value Per Share

Per-share output Value
Shares used 716,100,000.00
Share-count basis reported diluted weighted-average shares
Current market price $200.88
DCF indicative value per share $63.62
Indicative value vs. market price -68.33%

Model Integrity Checks

Check Result
Perpetuity growth is below the risk-free rate pass
Perpetuity growth is below WACC pass
WACC is within the configured operating-company range pass
Terminal-year FCFF is positive pass
Terminal capex converges to D&A pass
Terminal-value concentration within review band
Implied price differs from spot by more than 30% review required

2.6 Investor-Style Research Screen

Educational screen Result
Buffett-inspired cash-quality checks 4/4 evidenced checks
Lynch-inspired balance-and-growth checks 4/4 evidenced checks

Data lineage: Yahoo Finance public market and reported-statement data; retrieval timestamp: 2026-08-18 17:30:05.498330 UTC; latest reported fiscal period: 2025-12-31 00:00:00. Default assumptions: five-year forecast, mid-year discounting for explicit FCFF, a maximum 2.50% perpetuity-growth rate below both WACC and the risk-free rate, historical operating-ratio persistence, and capex convergence to D&A by year five. No sell-side consensus or management guidance is substituted for reported inputs. This is research and analysis only, not personalized financial advice.

2.7 Quantitative Factor Diagnostics

Model basis: Daily issuer USD excess returns are regressed in-sample using ordinary least squares on matching regional Fama–French factors. FF3 estimates market, size, and value loadings; FF5 adds profitability and investment. Coefficients are descriptive historical exposures, not predictions.

Estimation input Value
Regional factor set US
Factor-return currency USD
Issuer-return basis USD adjusted total return
Estimation window 2025-08-19 to 2026-06-30
Aligned daily observations 217
Minimum observation requirement 120
Currency conversion for HK listings not required

Fama–French Three-Factor and Five-Factor Results

Diagnostic FF3 FF5
Annualised alpha -21.70% -9.58%
Adjusted R² 0.13 0.22
Annualised residual volatility 26.79% 25.28%
Factor loading (t-statistic) FF3 FF5
Market excess return (Mkt-RF) 0.50 (3.17) 0.84 (4.91)
Size (SMB) 0.75 (3.51) 0.53 (2.44)
Value (HML) 0.02 (0.12) -0.60 (-2.79)
Profitability (RMW) NM 0.29 (1.60)
Investment (CMA) NM 1.38 (4.37)

Definitions: Mkt-RF is the market return less the risk-free rate; SMB is small minus big; HML is high minus low book-to-market; RMW is robust minus weak profitability; CMA is conservative minus aggressive investment. Factor returns are sourced from the Kenneth R. French Data Library; issuer adjusted-return history is sourced from Yahoo Finance. For Hong Kong listings, adjusted HKD prices are converted into USD with daily USD/HKD closes before return calculation to match the USD regional factor basis. This is an in-sample historical regression; coefficients and t-statistics do not establish causation or predict future returns. This is research and analysis only, not personalized financial advice.

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