Independent research on the U.S. markets, Baptista Research

Baptista Research

Independent research on the U.S. markets

Baptista Research is an independent financial research house focused on the U.S. markets. We provide equity research as well as credit research reports on the top-listed U.S. companies with most of our focus on technology, consumer goods and services, automobiles, industrials, oil and gas, pharma, and healthcare. Our research has served more than 3000 institutional investors including mutual funds, hedge funds, banks, family offices, and various buy-side firms. We operate a research subscription service where institutions, as well as retail investors, can have priority access to all our research. We also have a wide distribution of our research reports across some of the top global financial platforms. Apart from equity research and credit research, we also provide advisory services with respect to mergers & acquisitions (M&A), private equity/ venture capital fundraising, valuation reports, and investment management services for corporates.
Baptista Research is owned and managed by Ishan Majumdar, an ex-Venture Capitalist/ Investment Banker, a Chartered Accountant, and a Masters’ degree holder in Management from HEC Paris. Ishan has nearly a decade of experience in Mergers and Acquisitions, Leveraged Buyouts (LBOs), Venture Capital Investing, Corporate Strategy, and Valuation in front-office roles at the likes of BNP Paribas CIB, Credit Agricole CIB, Groupe Danone, and TIW Private Equity. He has worked on and closed multiple acquisition deals, leveraged buyouts, and start-up investment transactions.

Equity Bottom-Up

<ul><li>Danaher Corporation delivered a positive result and managed an all-around beat last quarter.</li><li>Transformative achievements and consistent performance marked the final quarter for Danaher Corporation despite a challenging operating environment.</li><li>As a more focused life sciences and diagnostic innovator, Danaher is advancing human health through science and technology.</li></ul>

Danaher Corporation delivered a positive result and managed an all-around beat last quarter.Transformative achievements and consistent performance marked the final quarter for Danaher Corporation despite a challenging operating environment.As a more focused life sciences and diagnostic innovator, Danaher is advancing human health through science and technology.

Danaher Corporation: Pioneering Global Health – The Road Ahead! - Major Drivers

Fundamental Short Selling Research

Eric Fernandez, CFA

TwoRiversAnalytics

Danaher designs, manufactures, and markets life science research tools, analytical instruments, reagents, consumables, and software as well as environmental  products and services. The company has over 20 businesses organized in three segments:  Life Sciences, with 51% of LTM revenues, Diagnostics with 32% and Environmental with 17%.
 We recommend selling DHR stock short (selling/avoiding for long managers).  The key elements of our short thesis are laid out below.
<ul>
<li>Sales spiked in Danaher’s Life Sciences and Diagnostics segments soon after the Covid pandemic surfaced.  These sales are unsustainable, in our view.</li>
<li>Danaher has weak organic growth, masked by a string of acquisitions.</li>
<li>
EBITDA margins added 1000bps over the past year, which we view as unsustainable.  </li>
<li>
The Covid pandemic will end through vaccination, therapeutics and natural attenuation resulting in the end of artificially inflated demand for Danaher’s products. </li>
<li>
We view estimates as too high with analysts largely extrapolating from current trends and levels.  
</li>
<li>
The stock is very expensive.  
</li>
<li>The company takes acquisition-related write-offs and benefitted from a reversion to lower tax rates last quarter.</li>
<li>
Potential Catalysts: We expect Danaher to show slower growth and lower margins which will cause a rerating of the stock and a cut in multiples.</li>
<li>
Risks:    Additional Covid variants could reignite the pandemic. We believe that is unlikely with the rapidly rising rates of global vaccination and the parallel development of therapeutics and additional vaccines.</li>
</ul>
 For further details, see the report below, and formatted PDF attached.

Danaher designs, manufactures, and markets life science research tools, analytical instruments, reagents, consumables, and software as well as environmental  products and services. The company has over 20 businesses organized in three segments:  Life Sciences, with 51% of LTM revenues, Diagnostics with 32% and Environmental with 17%.
 We recommend selling DHR stock short (selling/avoiding for long managers).  The key elements of our short thesis are laid out below.

Sales spiked in Danaher’s Life Sciences and Diagnostics segments soon after the Covid pandemic surfaced.  These sales are unsustainable, in our view.
Danaher has weak organic growth, masked by a string of acquisitions.

EBITDA margins added 1000bps over the past year, which we view as unsustainable.  

The Covid pandemic will end through vaccination, therapeutics and natural attenuation resulting in the end of artificially inflated demand for Danaher’s products. 

We view estimates as too high with analysts largely extrapolating from current trends and levels.  


The stock is very expensive.  

The company takes acquisition-related write-offs and benefitted from a reversion to lower tax rates last quarter.

Potential Catalysts: We expect Danaher to show slower growth and lower margins which will cause a rerating of the stock and a cut in multiples.

Risks:    Additional Covid variants could reignite the pandemic. We believe that is unlikely with the rapidly rising rates of global vaccination and the parallel development of therapeutics and additional vaccines.

 For further details, see the report below, and formatted PDF attached.

Danaher Corp (DHR):  Sell Short on an Overearning Thesis.

<ul><li>Danaher managed to exceed the revenue and earnings expectations of Wall Street despite a more dynamic operating environment.</li><li>Better-than-expected respiratory testing revenue and high single-digit base business core revenue growth in Life Sciences and Diagnostics helped counteract weaker base business demand in bioprocessing.</li><li>Besides, broad-based strength throughout the Cepheid test portfolio drove another quarter of more than 30% core growth in non-respiratory testing in Molecular Diagnostics.</li></ul>

Danaher managed to exceed the revenue and earnings expectations of Wall Street despite a more dynamic operating environment.Better-than-expected respiratory testing revenue and high single-digit base business core revenue growth in Life Sciences and Diagnostics helped counteract weaker base business demand in bioprocessing.Besides, broad-based strength throughout the Cepheid test portfolio drove another quarter of more than 30% core growth in non-respiratory testing in Molecular Diagnostics.

Danaher Corporation: What Is The Reason For Their Competitive Edge? - Key Drivers

<ul><li>Danaher successfully navigated a dynamic operating environment in this quarter to deliver an all-around beat.</li><li>The strength of its customer base business grew by 6% in this quarter.</li><li>For the quarter, the gross profit margin was 61% and the operating margin was down due to lower COVID volume in its diagnostics and biotechnology businesses.</li></ul>

Danaher successfully navigated a dynamic operating environment in this quarter to deliver an all-around beat.The strength of its customer base business grew by 6% in this quarter.For the quarter, the gross profit margin was 61% and the operating margin was down due to lower COVID volume in its diagnostics and biotechnology businesses.

Danaher Corporation: This Diagnostics Innovator Continues To Go Strong – Key Drivers

Global Healthcare Analyst

Tina Banerjee

<ul>
<li>
<a href="https://www.smartkarma.com/entities/takara-bio-inc" target="_blank" data-smartkarma-citation="entities:10766:1" rel="noopener">Takara Bio Inc (4974 JP)</a> reported massive decline of 50%, 98%, and 99%, YoY, in revenue, operating profit, and net profit, respectively during the first nine months of FY24.</li>
<li>Reagents revenue decline 56% YoY to ¥23 billion, due to decrease of sales of COVID-19 test-related reagents. Japan, which contributed 23% of reagents revenue, reported revenue decline of 83% YoY.</li>
<li>Takara Bio anticipates a sluggish life science R&amp;D market globally. FY24 revenue, operating profit, and net profit are expected to decline 42%, 85%, and 88%, YoY, respectively.</li>
</ul>



Takara Bio Inc (4974 JP) reported massive decline of 50%, 98%, and 99%, YoY, in revenue, operating profit, and net profit, respectively during the first nine months of FY24.
Reagents revenue decline 56% YoY to ¥23 billion, due to decrease of sales of COVID-19 test-related reagents. Japan, which contributed 23% of reagents revenue, reported revenue decline of 83% YoY.
Takara Bio anticipates a sluggish life science R&amp;D market globally. FY24 revenue, operating profit, and net profit are expected to decline 42%, 85%, and 88%, YoY, respectively.


Takara Bio (4974 JP): Limited Upside Potential Amid Poor Financial Result and Bleak Outlook

United States

Danaher Corporation designs, manufactures, and markets professional, medical, industrial and commercial products, and services in the sectors of test and measurement, environmental, life sciences, dental, and industrial technologies.

Danaher (DHR UN)

Danaher Corporation: Pioneering Global Health – The Road Ahead! - Major Drivers

Danaher Corporation delivered a positive result and managed an all-around beat last quarter. Transformative achievements and consistent...

Baptista Research

Danaher Corp (DHR): Sell Short on an Overearning Thesis.

Megacap life science & diagnostic company Danaher (DHR) is overearning due to Covid. We highlight weak organic growth, unsustainable margins,...

Eric Fernandez, CFA

Danaher Corporation: What Is The Reason For Their Competitive Edge? - Key Drivers

Danaher managed to exceed the revenue and earnings expectations of Wall Street despite a more dynamic operating environment. Better-than-expected...

Baptista Research

Danaher Corporation: This Diagnostics Innovator Continues To Go Strong – Key Drivers

Danaher successfully navigated a dynamic operating environment in this quarter to deliver an all-around beat. The strength of its customer base...

Baptista Research

Takara Bio (4974 JP): Limited Upside Potential Amid Poor Financial Result and Bleak Outlook

Takara Bio reports massive declines in sales and profit in 9MFY24, due to decrease of sales of COVID testing reagents. Company anticipates...

Tina Banerjee

Danaher Corporation: Pioneering Global Health – The Road Ahead! - Major Drivers

Danaher Corporation delivered a positive result and managed an all-around beat last quarter. Transformative achievements and consistent...

Baptista Research

Danaher Corp (DHR): Sell Short on an Overearning Thesis.

Megacap life science & diagnostic company Danaher (DHR) is overearning due to Covid. We highlight weak organic growth, unsustainable margins,...

Eric Fernandez, CFA

Danaher Corporation: What Is The Reason For Their Competitive Edge? - Key Drivers

Danaher managed to exceed the revenue and earnings expectations of Wall Street despite a more dynamic operating environment. Better-than-expected...

Baptista Research

Danaher Corporation: This Diagnostics Innovator Continues To Go Strong – Key Drivers

Danaher successfully navigated a dynamic operating environment in this quarter to deliver an all-around beat. The strength of its customer base...

Baptista Research

Takara Bio (4974 JP): Limited Upside Potential Amid Poor Financial Result and Bleak Outlook

​Takara Bio reports massive declines in sales and profit in 9MFY24, due to decrease of sales of COVID testing reagents. Company anticipates...

Tina Banerjee

Takara Bio reports massive declines in sales and profit in 9MFY24, due to decrease of sales of COVID testing reagents. Company anticipates...