Danaher slides 4.8% on weak Life Sciences outlook despite Q4 earnings beat
Healthcare conglomerate tops estimates but flat 2026 projection for core life sciences segment spooks investors
Danaher shares fell 4.8% on Thursday, extending a recent pattern of steep post-earnings declines, after the healthcare conglomerate delivered better-than-expected fourth-quarter results but projected lackluster growth for its Life Sciences business through 2026.
The company reported fourth-quarter earnings of $2.23 per share, surpassing analyst estimates of $1.72, representing a 29.5% beat. Revenue reached $6.84 billion, topping Wall Street expectations of $6.00 billion by 14%. Danaher also generated $2.1 billion in operating cash flow and $1.8 billion in free cash flow during the period.
Despite the robust quarter, investors focused on the company's 2026 guidance, which calls for earnings per share of $8.35 to $8.50 and core revenue growth of just 3% to 6%. More concerning to analysts, the Life Sciences segment—Danaher's largest division—is expected to deliver flat performance for the full year.
The Life Sciences weakness reflects ongoing soft demand from biotechnology and pharmaceutical customers who have reduced spending on tools and services used in drug development. The company has faced similar headwinds throughout 2025, particularly in equipment orders from smaller customers in China who have remained cautious about capital investments.
Danaher's chief executive expressed optimism about the company's bioprocessing business, which management forecasts will deliver high single-digit growth in 2026. However, this strength is expected to be partially offset by more modest performance in the broader life sciences market, where large pharmaceutical customers face pressure to reduce costs.
The stock decline mirrors a similar reaction in January 2025, when Danaher shares plunged 9.7% after the company missed profit estimates and projected a low-single-digit decline in adjusted core revenue for the first quarter of that year. The latest drop leaves shares trading at $224.54, roughly 15% below their 52-week high of $256.62.
Nevertheless, Wall Street analysts maintain a generally bullish long-term view on Danaher. Among 23 analysts covering the stock, 18 rate it a strong buy while five recommend hold, according to market data. The consensus price target stands at $263.05, suggesting potential upside of approximately 17% from current levels.
The company's 2026 guidance incorporates approximately $0.30 per share of expected benefit from around $250 million in cost actions implemented during 2025. Danaher also targets an adjusted operating profit margin of roughly 28.5% for the year.
The mixed reaction underscores investor sensitivity to Danaher's Life Sciences segment, which remains a critical driver of the company's performance. While the bioprocessing business shows momentum, sustained recovery in the broader life sciences market will likely be necessary for the stock to recoup its recent losses and approach analysts' price targets.