Danaher 2Q'26: Yet Another "Meh" Quarter

Danaher is one of those compounders that has largely lost its luster in current market. However, Danaher shareholders cannot quite blame Mr. Market since 2Q’26 earnings didn’t provide much of an evidence of Danaher getting out of their growth slump that they have been under for multiple years.

The company reported yet another anemic core revenue growth of 3.0% in 2Q’26. It has been now FOURTEEN long quarters Danaher reported BELOW MSD core revenue growth every single quarter. Management even invented a new “Danaher ex respiratory” metric to show that the business will return to MSD core revenue growth (ex respiratory) in the next couple of quarters. I wonder why they didn’t show such adjustments when respiratory was a tailwind to overall core revenue growth. Or to say it differently, I’m not sure Danaher management will adjust core revenue growth downward in future years if respiratory again becomes a tailwind to organic growth. It is perhaps telling that despite such adjustments, the company still has hard time posting even MSD organic growth these days.

If anything, Danaher shareholders perhaps should thank Mr. Market that investors have been so patient given that the company still trades at not-so-cheap multiple. To assess Danaher’s earnings power, I typically look at their LTM adjusted EBITA figure which was $7.1 Billion in 2Q’26. For context, two years ago the LTM EBITA in 2Q’24 was $7.0 Billion. So, the earnings power is essentially flat over the last couple of years. Given Danaher’s ~$150 Billion Enterprise Value (EV) today, the company still trades at mid-20s multiple of this earnings power (after taking taxes into account). As you can see, you could perhaps legitimately still argue that such multiple is generous for a company that has found it very, very difficult to compound their earnings power for the last three years.

I will dissect the quarter segment by segment behind the paywall.

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