As of June 5, 2025, Danaher Corp's estimated intrinsic value ranges from $82.08 to $185.19 per share, depending on the valuation methodology applied.
| Valuation Method | Fair Value (USD) | Implied Upside/Downside |
|---|---|---|
| Discounted Cash Flow (10Y) | $185.19 | -4.1% |
| Discounted Cash Flow (5Y) | $156.13 | -19.1% |
| Dividend Discount Model (Multi-Stage) | $125.89 | -34.8% |
| Dividend Discount Model (Stable) | $121.29 | -37.2% |
| Earnings Power Value | $82.08 | -57.5% |
Is Danaher Corp (DHR) undervalued or overvalued?
With the current market price at $193.08, the stock appears to be significantly overvalued.
Intrinsic value represents the "true" worth of a company based on its fundamentals rather than market sentiment. We've employed multiple methodologies to triangulate Danaher Corp's intrinsic value, including:
The cost of capital is a critical factor in valuation models, representing the required return for investors.
| WACC Component | Low | High |
|---|---|---|
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 0.78 | 0.98 |
| Cost of equity | 7.5% | 10.3% |
| Cost of debt | 4.0% | 4.5% |
| Tax rate | 16.2% | 16.3% |
| Debt/Equity ratio | 0.12 | 0.12 |
| After-tax WACC | 7.0% | 9.6% |
Our DCF model projects cash flows over 5-year and 10-year horizons, with the following key assumptions:
| DCF Model | Fair Value | Enterprise Value | % from Terminal Value |
|---|---|---|---|
| 5-Year Growth | $156 | $126,220M | 82.4% |
| 10-Year Growth | $185 | $147,016M | 68.7% |
| 5-Year EBITDA | $147 | $119,968M | 81.5% |
| 10-Year EBITDA | $175 | $139,750M | 67.0% |
The DDM values a company based on its expected future dividend payments. We used two approaches:
EPV assesses a company's value based on its current normalized earnings power, assuming no growth.
| EPV Component | Value |
|---|---|
| Normalized Earnings | $5,954M |
| Discount Rate (WACC) | 9.6% - 7.0% |
| Enterprise Value | $61,741M - $84,714M |
| Net Debt | $14,484M |
| Equity Value | $47,257M - $70,230M |
| Outstanding Shares | 716M |
| Fair Value | $66 - $98 |
| Selected Fair Value | $82.08 |
| Metric | Value |
|---|---|
| Market Capitalization | $138182M |
| Enterprise Value | $152666M |
| Trailing P/E | 36.70 |
| Forward P/E | 32.51 |
| Trailing EV/EBITDA | 15.45 |
| Current Dividend Yield | 57.76% |
| Dividend Growth Rate (5Y) | 5.71% |
| Debt-to-Equity Ratio | 0.12 |
To determine the most reliable intrinsic value estimate, we weigh each valuation method based on:
| Valuation Method | Weight | Weighted Value |
|---|---|---|
| Discounted Cash Flow (10Y) | 30% | $55.56 |
| Discounted Cash Flow (5Y) | 25% | $39.03 |
| Dividend Discount Model (Multi-Stage) | 20% | $25.18 |
| Dividend Discount Model (Stable) | 15% | $18.19 |
| Earnings Power Value | 10% | $8.21 |
| Weighted Average | 100% | $146.17 |
Based on our comprehensive valuation analysis, Danaher Corp's weighted average intrinsic value is $146.17, which is approximately 24.3% below the current market price of $193.08.
Key investment considerations:
Given these factors, we believe Danaher Corp is currently significantly overvalued with the potential for long-term appreciation based on the company's growth trajectory and financial strength.