Shares of Danaher Corporation (NYSE:DHR) dropped as much as 16% in regular trading yesterday after completing the spinoff of its Veralto unit. DHR stock hit a fresh 52-week low of $208.96 before ending the day, down 2.8% at $213.74, on October 2.
Danaher manufactures, designs, and markets professional, medical, industrial, and commercial products and services. Meanwhile, Veralto focuses on water quality and product identification.
In conjunction with the spin-off, Danaher exchanged one share of Veralto for every three shares held in DHR stock on Saturday, September 30. Veralto started trading on the New York Stock Exchange yesterday under the ticker symbol VLTO. Danaher distributed roughly 246 million Veralto shares in the transaction.
Commenting on the separation, Danaher’s President and CEO, Rainer Blair, said, “The successful spin-off of Veralto as an independent company creates exceptional opportunities for both Danaher and Veralto to better serve their customers, deliver on their respective strategic priorities, and create greater long-term shareholder value.”
Is DHR a Good Stock to Buy?
Wall Street analysts believe that the Veralto separation will help boost Danaher’s performance as a healthcare-focused company. Many analysts have lowered the price target on the stock to reflect the true value of the corporation after the spin-off.
Ahead of the spin-off, KeyBanc analyst Paul Knight cut the price target on DHR stock to reflect the company’s revised value after the separation. Knight believes that the spin-off will unlock a higher value for the core business of Danaher, with a focus on a pure-play life science firm. The analyst has a Buy rating on DHR, and the new price target of $300 (earlier $325) implies 40.4% upside potential from current levels.
Overall, Danaher stock commands a Strong Buy consensus rating on TipRanks. This is based on 10 Buys and three Hold ratings received during the last three months. Also, the average Danaher price forecast of $280.75 implies 31.4% upside potential from current levels. Year-to-date, DHR stock has lost 18.3%.
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