In the complex realm of financial markets, forward guidance plays a crucial role in influencing investor sentiment and stock prices. When a company issues a warning regarding potential declines in profit, it often results in a noticeable dip in its stock value. This phenomenon, however, presents both challenges and opportunities. Dan Kemp, the chief research and investment officer at Morningstar, emphasizes that while immediate reactions may seem negative, the majority of a company's value is rooted in its future prospects. He argues that an expanding gap between current stock prices and future real values can create fertile ground for savvy market investors.

As the earnings season for the first quarter of 2025 is currently in full swing, investors are bracing themselves for heightened scrutiny over corporate outlooks. This time around, the uncertainty brought about by ongoing tariff discussions is leading many companies to either issue weaker guidance, provide less confident forecasts, or forego guidance altogether. Tariffs have far-reaching implications for corporate profitability, affecting both the bottom line directly and indirectly. Increased costs associated with imports can place significant pressure on profit margins. While some companies may choose to pass these costs onto consumers through price hikes, others may opt to absorb them, leading to reduced margins.

According to Morningstar, which cited consensus estimates from FactSet, analysts are projecting an earnings growth of 6.8% for companies within the S&P 500 index during the first quarter of 2025. For the entire year, expectations are even more optimistic, with an anticipated growth rate of 11.2%.

Goldman Sachs has noted that global equities have fluctuated in and out of bear market territory, typically defined as a 20% decline from a recent peak. Peter Oppenheimer, the chief global equity strategist at Goldman Sachs Research, points out that historical patterns in bear markets may offer valuable insights into their duration and severity. Following former President Trumps announcement to temporarily pause additional country-specific tariffs for a 90-day period, U.S. stocks experienced a notable uptick. Despite this positive movement, Oppenheimer cautions that a sustained recovery is not yet assured, suggesting that current valuations must undergo further adjustments before the market can shift into a phase characterized by optimism.

In light of these economic dynamics, Goldman Sachs Research has urged investors to diversify their portfolios both geographically and across various investment styles. This includes a focus on low-volatility stocks, typically found in more defensive sectors, which tend to be less susceptible to market fluctuations.

Recently, we compiled a list of the 15 Best Large-Cap Value Stocks to Consider Amid Recessionary Pressures. This article will explore how Thermo Fisher Scientific Inc. (NYSE:TMO) compares to other prominent large-cap value stocks as the recession continues to unfold.

At the forefront, Thermo Fisher Scientific Inc. (NYSE:TMO) stands out as a key player in providing life sciences solutions, analytical instruments, specialty diagnostics, laboratory products, and biopharma services. Analyst Puneet Souda from Leerink Partners has reiterated a bullish outlook for Thermo Fisher, maintaining a 'Buy' rating on the stock. This optimistic stance is supported by the company's strategic acquisition of Solventums Purification and Filtration business, which is expected to bolster its presence in the bioprocessing sector, particularly in filtration.

The integration of Solventums business into Thermo Fisher is projected to yield mid-to-high single-digit organic growth rates. Furthermore, the application of the PPI Business System is anticipated to drive significant margin expansion and foster synergies. Another endorsement for Thermo Fisher comes from Michael Ryskin at Bank of America Securities, who has also issued a 'Buy' rating with a price target of $680.00, noting the strong complementarity of Solventums offerings to Thermo Fishers existing bioproduction portfolio.

According to the Q4 2024 investor letter from Polen Capital, Thermo Fisher appears to be navigating past the challenges posed by COVID-19, which had previously hindered its growth. Despite facing pressure from substantial budget cuts in the pharmaceutical industry and a decline in biotech funding over the past year, recent underperformance is largely attributed to concerns over increased regulatory scrutiny under the new administration, particularly following RFK Jr.s appointment as the head of the U.S. Department of Health and Human Services and his vocal opposition to pharmaceutical pricing practices.

In challenging economic climates, pharmaceutical and biotech companies often turn to suppliers that provide the best value, and Thermo Fisher's extensive portfolio allows it to capture significant market share. The firm maintains a strong long-term conviction in Thermo Fisher, citing its robustness as a compounder capable of sustaining growth through various macroeconomic conditions.

Overall, Thermo Fisher ranks third on our list of best large-cap value stocks to consider during the ongoing recession. While we acknowledge the companys potential as an investment, there remains a belief that some undervalued AI stocks may present greater opportunities for higher returns in a shorter time frame. For example, one AI stock has shown an upward trend since the beginning of 2025, contrasting with many popular AI stocks that have seen declines of around 25%. To learn more about a promising AI stock trading at under five times its earnings, be sure to check out our detailed report.

Stay tuned for our upcoming articles featuring the 20 Best AI Stocks to Buy Now and the 30 Best Stocks to Buy According to Billionaires.

Disclosure: None of the information provided in this article should be considered as financial advice. The article was originally published by Insider Monkey.