Danaher (DHR) shares were up about 4% on Wednesday (trading at about $233) after the life sciences company beat third-quarter profit estimates and raised its full-year earnings guide. The stock opened about 3% lower before buyers took over.
The bigger move came before today. Danaher stock is up about 30% since it closed at $179.01 on July 21, the day its second-quarter report knocked it down 11%. Its 2026 adjusted EPS guidance midpoint rose just 0.8% over the same stretch. Measured against that guidance, its P/E expanded from about 21x to 27.1x.
What Danaher Delivered on October 21
Danaher’s third-quarter release showed:
- Adjusted EPS of $2.11, up 11.5% and ahead of the $1.92 consensus.
- Revenue of $6.554 billion, up 8.5% and in line with estimates.
- Core revenue growth of 3%, or 5.5% excluding respiratory testing (up from 4.5% in the second quarter).
- Full-year adjusted EPS guidance of $8.57 to $8.62, up from $8.45 to $8.60.
CEO Julie Sawyer Montgomery said in the release that Danaher is “encouraged by the improving trends we saw across our end markets.”
Danaher’s Rally Looks Like It Came From Its Multiple
Danaher’s guide midpoint moved from $8.525 to $8.595 between July and today. The stock didn’t wait for the earnings to catch up.
On next-twelve-month estimates, which now reach into 2027, Danaher trades at 25.34x. That’s well off its five-year low of 18.94x, set earlier this year, but still below its five-year average of 27.29x and far from the 34.97x peak. So the rally pulled the multiple off its floor. It hasn’t pushed Danaher into premium territory.
Why Danaher’s 3% Core Growth Undersells the Quarter
The bear case is the headline number: core revenue grew just 3%, and Danaher guides to about 3% again in the fourth quarter.
Respiratory testing explains the gap. Those sales fell to about $350 million from about $500 million a year earlier, and should total about $1.5 billion in 2026, against $1.9 billion in 2025. That $400 million drop is roughly 1.6% of Danaher’s $25.1 billion of trailing revenue. In Diagnostics, it cut core growth to 0.5%, from 7% excluding respiratory.
The drag is also shrinking, to about 150 basis points in the fourth quarter from 250 in the third. Bioprocessing orders grew in the mid-teens.
TIKR tracks 25 analysts on Danaher. How many say “Buy”?
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Conclusion
Analysts expect normalized EPS of $8.51 this year, $9.30 in 2027 and $10.24 in 2028, growth of 9% to 10% a year. Danaher’s own guide already sits above that 2026 figure.
I don’t read today’s move as froth. Danaher earned back much of its old multiple with 5.5% underlying growth and a raised guide. The cheap part is gone, though. With the multiple about 2 turns below its five-year average, the next leg depends on earnings.
The Street’s 2027 estimate implies about 9% EPS growth, but most of that is already in today’s next-twelve-month estimate, which now covers most of 2027. From $233, the stock needs Danaher to deliver that $9.30 and hold a multiple near 25x.
So what is Danaher stock actually worth?
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