Dethroned S&P 500 champion Danaher spends without convincing
DHR
A status quo persists at Danaher, which yesterday reported its Q1 results.
Kevin Smith
Published on 04/22/2026 at 03:44 am EDT
The first three months of FY 2026 are in all respects comparable to the first three months of the previous year, both in terms of revenue - which is growing at a rate barely above inflation - and profit.
However, the news of the past period was primarily marked by the announcement last February of the acquisition of California-based Masimo, known for its oxygen monitoring devices, which will bolster Danaher's diagnostics segment.
The Washington-based conglomerate remains mired in a painful period of stagnation, likely reflecting a still very difficult environment in the life sciences industries where its clients operate. Consequently, both its revenue and free cash flow have been flat for 6 years now.
The situation is all the more critical given that in the meantime, the group founded by the Rales brothers, whose stock was for a long time the top performer in the S&P 500, has spent a staggering $18bn on acquisitions, so far without tangible return on investment.
The last real boost to results dates back to 2020, with the $21bn acquisition of Cytiva, the former biopharma division of General Electric - another conglomerate then in difficulty, but recently expertly restructured, by, as fate would have it, former Danaher CEO Larry Culp.
Admittedly, it should be noted that the spin-off of Veralto - the former division specialized in water treatment - removed nearly a billion dollars in free cash flow from the scope. Nevertheless, Danaher's economic performance has been disappointing for some time, tarnishing the reputation of a group once renowned for being one of the shrewdest acquirers in the American market.
Danaher will need to deliver a solid range of synergies if it hopes to create value from the Masimo acquisition, as it is putting $9.9bn on the table to buy a company that last year generated $1.5bn in revenue - a figure that has doubled in ten years - and $350m in EBITDA.