Thermo Fisher Scientific Inc.

“Thermo Fisher is a structurally exceptional business — dominant scale, compound moat, 75-80% recurring revenues, and $6.5B in annual FCF — operating in secular growth markets where it holds an irreplaceable position. The post-COVID normalization is largely understood and likely nearer the end than the beginning. However, at $460 (16.8x forward earnings), the valuation is fair but not cheap enough to warrant aggressive conviction given real and potentially durable headwinds from NIH funding cuts, China decoupling risk, and a goodwill/debt-heavy balance sheet that limits margin of safety. Expected returns of 10-12% annualized over a decade are reasonable, not exceptional, at current prices. The right posture is a small starter position with a plan to add meaningfully in the $385-420 range where the margin of safety becomes genuinely compelling.”