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RBC Capital Markets suggests Danaher as a potential investment due to its appealing valuation and upside potential. Deane Daray, analyst for RBC Capital Markets, upgraded Danaher stock to sector outperform. In a Tuesday note, he said that Danaher’s high quality stock should not be taken lightly amid inflation and rising supply chain. Dray also raised the price target to $310, from $299. Nearly 18% of Tuesday’s closing stock price at the diagnostics firm was redeemed by this new price target. Dray explained that Danaher was being upgraded from Sector Perform/Outperform because it has a high-quality, protective portfolio which is incrementally attractive considering the Wall of Worry/macro fear. The sector calls for more defensive exposures. “This upgrade is consistent with that call.” Danaher is a firm that likes because it has organic revenue growth and free money flow conversion. Danaher boasts 75% of its recurring revenues, and 85% is exposed to healthcare markets for diagnostics or life sciences. The company believes that investors can own high-quality, defensive stocks because its current valuation is lower than the historical performance of its peers. Dray said that “we believe Danaher’s COVID comps will be too severe, which creates an opportunity for this high-quality defensive name to be purchased at a low entry price.” —CNBC’s Michael Bloom contributed to this report.
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