Thermo Fisher Positioned As Biopharma's Partner Of Choice

Could Thermo Fisher Scientific Inc. TMO be the unsung hero of the biopharma sector's future? While its stock performance has recently lagged, analysts are betting on a major turnaround driven by strategic acquisitions and robust growth potential. William Blair initiated coverage on Tuesday on Thermo Fisher Scientific, citing a strong balance sheet and impressive M&A track record.

Analyst Matt Larew notes that Thermo Fisher has outperformed the S&P 500 over the past decade, delivering a 290% return since 2015, compared to the index's 213%.

However, shares have lagged in recent years, falling 27% since the end of 2021 while the S&P gained more than 30%.

This pullback is in line with peers, as life science tools companies and pharma services firms are down 45% and 17% on average, respectively, over the same period.

Since 2017, Thermo has made significant acquisitions and organic investments to bolster its biopharma services offerings, accounting for over 60% of laboratory products and biopharma services revenue and roughly one-third of total company sales.

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Thermo Fisher Scientific reported second-quarter 2025 adjusted earnings of $5.36 per share, beating the street view of $5.23.

Quarterly sales of $10.86 billion increased 3% year-over-year, beating the analyst consensus estimate of $10.68 billion. Organic revenue growth was 2%.

To navigate Trump tariff challenges, Thermo Fisher Scientific announced it would invest an additional $2 billion in the U.S. over the next four years.

William Blair models $27.17 of EPS in 2027 in the base-case scenario. The analyst writes that the resolution of current headwinds and further appreciation for Thermo's one-stop-shop pharma partnership strategy will help the multiple improve from near lows to roughly 22 times, near its 10-year average of 22.4x, yielding a share price of roughly $598 at the end of 2026, or 22% upside to current levels.

The analyst initiated with an Outperform rating.

“For investors looking to play a recovery in the broader life science tools and pharma services space, there is no better large-cap option than Thermo, in our opinion,” the analyst wrote.

Thermo's positive outlook stems from its growing services business, strengthening its role as a key biopharma partner.

Larew further says that with a solid balance sheet and strong M&A track record, the company is well-positioned to expand further in high-growth areas like bioproduction.

William Blair sees Thermo's broad scale and partner-of-choice status in pharma and biotech, positioning it to gain market share and emerge stronger from near-term challenges.

Thermo Fisher is considered the biopharma industry’s partner of choice through future acquisitions.

“We expect M&A activity to remain a significant part of Thermo's near- and long-term strategy, with the company leveraging its strong record to drive further improvements in ROIC over time,” the analyst wrote in the initiation note.

TMO Price Action: Thermo Fisher Scientific shares were up 2.16% at $498.07 at the time of publication on Tuesday, according to Benzinga Pro data.

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