Categories: Invest

Danaher Corporation’s price rally nears a stop. Should you sell now?

Danaher Corporation (NYSE:DHR) has been a stock to watch since the pandemic broke out. The company which manufactures diagnostic consumables recorded growth in revenue during the pandemic.

With coronavirus becoming endemic, demand for the consumables is set to flatten and may slow down. However, the company is still set for double digit growth in the foreseeable future.


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The stock is trading at $299.66. The company’s forward PE is 28.79 making the stock somewhat overvalued compared to earnings. PEG ratio is at 1.40, confirming that the stock is trading above fair value. We project the fair value to be about $215, signaling the need for investors to sell now.

Danaher Corporation is set to decline as moving averages reverse trend

Source – TradingView

A study of the share price indicates that lower-term moving averages for 10 and 20 days sank below the 50-day since March. While the price seemed to find momentary support at $260, the continuation of the short-term decline is likely to see the stock falling further.

The potential downward trend is confirmed by the 14-day average of the RSI, which continues its downward trend uninhibited. This analysis considers the moving averages pattern as an early signal for a change in the price trend. Bears may take control in the coming days. At $299.66, the stock is most certainly a strong sell.

Summary

Danaher Corporation is a high-growth large capitalization firm. The company is expected to face a slowdown in revenues as coronavirus becomes endemic and testing falls. We think that the fair value is about $215, and investors should sell.

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