Barclays Expects A 'Tangible Catalyst' For Danaher Corp This Summer

The two analysts believe the time has come to revisit Danaher following the expected Danaher/Fortive spinoff expected to take effect during the first week of July. They also believe the spinoff will help to accelerate shareholder value and unlock that value when it aligns with the parent firm.

"Both companies have high-quality assets and portfolio optionality. For DHR RemainCo, value creation post-spin should come from its re-engagement in M&A, accelerating accretion from the Pall deal, and a portfolio that should post positive growth in 2017, even assuming the macro decelerates from here," the two analysts wrote to their clients in a research note.

Related Link: Danaher Reports Declaration Of Pro Rata Dividend Of Fortive Common Shares

The two analysts think the M&A should be an important driver for Fortive. The brokerage sees less clear growth prospects after the Brexit vote in the second half of the current year and the first half of the next year. That is because the company is less exposed to Europe while exposing itself more toward America.

Barclays concluded by saying, "We have identified a relevant comp set and have used that comp set to arrive at what we believe is a fair valuation range for Fortive shares ($55–$65, assuming a 350 million share count)."

At time of writing, Danaher was down 0.75 percent at $97.47.