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Why the Market Dipped But Danaher (DHR) Gained Today

Danaher (DHR) ended the recent trading session at $255.71, demonstrating a +0.33% swing from the preceding day's closing price. The stock's change was more than the S&P 500's daily loss of 0.17%. Elsewhere, the Dow lost 0.06%, while the tech-heavy Nasdaq lost 0.55%.

The industrial and medical device maker's shares have seen an increase of 4.05% over the last month, not keeping up with the Conglomerates sector's gain of 7.17% and outstripping the S&P 500's gain of 3.98%.

The investment community will be paying close attention to the earnings performance of Danaher in its upcoming release. It is anticipated that the company will report an EPS of $1.74, marking a 26.27% fall compared to the same quarter of the previous year. At the same time, our most recent consensus estimate is projecting a revenue of $5.64 billion, reflecting a 21.31% fall from the equivalent quarter last year.

For the full year, the Zacks Consensus Estimates are projecting earnings of $7.63 per share and revenue of $24.09 billion, which would represent changes of +0.66% and -12.73%, respectively, from the prior year.

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It is also important to note the recent changes to analyst estimates for Danaher. These recent revisions tend to reflect the evolving nature of short-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Empirical research indicates that these revisions in estimates have a direct correlation with impending stock price performance. To utilize this, we have created the Zacks Rank, a proprietary model that integrates these estimate changes and provides a functional rating system.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 1.93% lower. At present, Danaher boasts a Zacks Rank of #3 (Hold).

In terms of valuation, Danaher is presently being traded at a Forward P/E ratio of 33.4. This denotes a premium relative to the industry's average Forward P/E of 17.32.

Also, we should mention that DHR has a PEG ratio of 3.87. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. DHR's industry had an average PEG ratio of 2.31 as of yesterday's close.

The Diversified Operations industry is part of the Conglomerates sector. This industry, currently bearing a Zacks Industry Rank of 28, finds itself in the top 12% echelons of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Keep in mind to rely on Zacks.com to watch all these stock-impacting metrics, and more, in the succeeding trading sessions.

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