Latest news with #FTV
Business Insider
3 days ago
- Business
- Business Insider
Fortive Stock (FTV) Hits 52-Week Low After Ralliant Spin-Off—Should You Buy the Dip?
Fortive Corporation (FTV) shares plunged to a fresh 52-week low following the company's completed spin-off of its Precision Technologies segment into the newly formed Ralliant Corporation. The market's reaction was swift and sharp, raising concerns among investors about Fortive's near-term outlook. Don't Miss TipRanks' Half-Year Sale Take advantage of TipRanks Premium at 50% off! Unlock powerful investing tools, advanced data, and expert analyst insights to help you invest with confidence. Make smarter investment decisions with TipRanks' Smart Investor Picks, delivered to your inbox every week. Despite near-term headwinds, Wall Street remains optimistic about the company's long-term prospects, with analysts projecting over 50% upside from current levels. With Fortive stock now trading at its lowest level in a year, the recent dip may present a favorable entry point for investors. Investor Sentiment Turns Negative on FTV Stock The industrial conglomerate confirmed the successful completion of its 100% spin-off of Ralliant, which now trades independently on the NYSE under the ticker symbol RAL. As part of the transaction, Fortive shareholders received one Ralliant share for every three Fortive shares held as of the June 16, 2025, record date. Although Fortive's spin-off was widely anticipated, the stock declined after the company warned of unexpected revenue pressures. The company blamed the softer performance on rising tariff-related pricing pressures and weaker customer demand, driven by uncertainty in trade, healthcare, and government spending. As a result, Fortive now expects second-quarter revenue and core revenue to be flat or slightly negative. Still, it maintains its forecast for adjusted EPS to land near the midpoint of its prior guidance. What's Next for Investors? The spin-off was structured to be tax-free for Fortive shareholders and anyone entitled to partial shares received cash instead. Through this spin-off, Fortive kept its higher-margin Intelligent Operating Solutions and Advanced Healthcare Solutions segments. Meanwhile, Ralliant took over the more capital-intensive Precision Technologies business. For investors, the spin-off creates clearer value propositions, with Fortive focusing on higher-margin, recurring-revenue segments. This strategic clarity could enhance long-term shareholder value. Is Fortive a Good Stock to Buy? According to TipRanks' consensus, FTV stock has a Moderate Buy consensus rating based on eight Buys and six Holds assigned in the last three months. At $80.58, the average Fortive share price target implies a 55% upside potential.
Yahoo
25-05-2025
- Business
- Yahoo
Fortive Corporation's (NYSE:FTV) Intrinsic Value Is Potentially 27% Above Its Share Price
Using the 2 Stage Free Cash Flow to Equity, Fortive fair value estimate is US$88.77 Fortive's US$69.67 share price signals that it might be 22% undervalued Analyst price target for FTV is US$83.49 which is 5.9% below our fair value estimate Does the May share price for Fortive Corporation (NYSE:FTV) reflect what it's really worth? Today, we will estimate the stock's intrinsic value by taking the expected future cash flows and discounting them to their present value. Our analysis will employ the Discounted Cash Flow (DCF) model. There's really not all that much to it, even though it might appear quite complex. We generally believe that a company's value is the present value of all of the cash it will generate in the future. However, a DCF is just one valuation metric among many, and it is not without flaws. If you want to learn more about discounted cash flow, the rationale behind this calculation can be read in detail in the Simply Wall St analysis model. We've discovered 1 warning sign about Fortive. View them for free. We are going to use a two-stage DCF model, which, as the name states, takes into account two stages of growth. The first stage is generally a higher growth period which levels off heading towards the terminal value, captured in the second 'steady growth' period. To start off with, we need to estimate the next ten years of cash flows. Where possible we use analyst estimates, but when these aren't available we extrapolate the previous free cash flow (FCF) from the last estimate or reported value. We assume companies with shrinking free cash flow will slow their rate of shrinkage, and that companies with growing free cash flow will see their growth rate slow, over this period. We do this to reflect that growth tends to slow more in the early years than it does in later years. Generally we assume that a dollar today is more valuable than a dollar in the future, and so the sum of these future cash flows is then discounted to today's value: 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 Levered FCF ($, Millions) US$1.36b US$1.47b US$1.62b US$1.64b US$1.67b US$1.71b US$1.75b US$1.79b US$1.84b US$1.89b Growth Rate Estimate Source Analyst x9 Analyst x6 Analyst x3 Analyst x1 Est @ 1.77% Est @ 2.12% Est @ 2.37% Est @ 2.54% Est @ 2.66% Est @ 2.74% Present Value ($, Millions) Discounted @ 7.8% US$1.3k US$1.3k US$1.3k US$1.2k US$1.2k US$1.1k US$1.0k US$985 US$938 US$895 ("Est" = FCF growth rate estimated by Simply Wall St)Present Value of 10-year Cash Flow (PVCF) = US$11b The second stage is also known as Terminal Value, this is the business's cash flow after the first stage. For a number of reasons a very conservative growth rate is used that cannot exceed that of a country's GDP growth. In this case we have used the 5-year average of the 10-year government bond yield (2.9%) to estimate future growth. In the same way as with the 10-year 'growth' period, we discount future cash flows to today's value, using a cost of equity of 7.8%. Terminal Value (TV)= FCF2034 × (1 + g) ÷ (r – g) = US$1.9b× (1 + 2.9%) ÷ (7.8%– 2.9%) = US$40b Present Value of Terminal Value (PVTV)= TV / (1 + r)10= US$40b÷ ( 1 + 7.8%)10= US$19b The total value, or equity value, is then the sum of the present value of the future cash flows, which in this case is US$30b. The last step is to then divide the equity value by the number of shares outstanding. Relative to the current share price of US$69.7, the company appears a touch undervalued at a 22% discount to where the stock price trades currently. Remember though, that this is just an approximate valuation, and like any complex formula - garbage in, garbage out. We would point out that the most important inputs to a discounted cash flow are the discount rate and of course the actual cash flows. Part of investing is coming up with your own evaluation of a company's future performance, so try the calculation yourself and check your own assumptions. The DCF also does not consider the possible cyclicality of an industry, or a company's future capital requirements, so it does not give a full picture of a company's potential performance. Given that we are looking at Fortive as potential shareholders, the cost of equity is used as the discount rate, rather than the cost of capital (or weighted average cost of capital, WACC) which accounts for debt. In this calculation we've used 7.8%, which is based on a levered beta of 1.117. Beta is a measure of a stock's volatility, compared to the market as a whole. We get our beta from the industry average beta of globally comparable companies, with an imposed limit between 0.8 and 2.0, which is a reasonable range for a stable business. See our latest analysis for Fortive Strength Debt is not viewed as a risk. Weakness Earnings declined over the past year. Dividend is low compared to the top 25% of dividend payers in the Machinery market. Opportunity Annual earnings are forecast to grow faster than the American market. Trading below our estimate of fair value by more than 20%. Threat Annual revenue is forecast to grow slower than the American market. Whilst important, the DCF calculation ideally won't be the sole piece of analysis you scrutinize for a company. The DCF model is not a perfect stock valuation tool. Instead the best use for a DCF model is to test certain assumptions and theories to see if they would lead to the company being undervalued or overvalued. For instance, if the terminal value growth rate is adjusted slightly, it can dramatically alter the overall result. What is the reason for the share price sitting below the intrinsic value? For Fortive, we've put together three important elements you should assess: Risks: As an example, we've found 1 warning sign for Fortive that you need to consider before investing here. Management:Have insiders been ramping up their shares to take advantage of the market's sentiment for FTV's future outlook? Check out our management and board analysis with insights on CEO compensation and governance factors. Other Solid Businesses: Low debt, high returns on equity and good past performance are fundamental to a strong business. Why not explore our interactive list of stocks with solid business fundamentals to see if there are other companies you may not have considered! PS. Simply Wall St updates its DCF calculation for every American stock every day, so if you want to find the intrinsic value of any other stock just search here. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. 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Yahoo
15-05-2025
- Business
- Yahoo
FTV Q1 Earnings Call: Tariffs, Segment Divergence, and Leadership Transition Shape Outlook
Industrial technology company Fortive (NYSE:FTV) missed Wall Street's revenue expectations in Q1 CY2025, with sales falling 3.3% year on year to $1.47 billion. Its non-GAAP profit of $0.85 per share was in line with analysts' consensus estimates. Is now the time to buy FTV? Find out in our full research report (it's free). Revenue: $1.47 billion vs analyst estimates of $1.5 billion (3.3% year-on-year decline, 1.4% miss) Adjusted EPS: $0.85 vs analyst estimates of $0.85 (in line) Adjusted EBITDA: $396 million vs analyst estimates of $398.1 million (26.9% margin, 0.5% miss) Management lowered its full-year Adjusted EPS guidance to $3.90 at the midpoint, a 3.9% decrease Operating Margin: 15.8%, down from 19.8% in the same quarter last year Free Cash Flow Margin: 14.6%, similar to the same quarter last year Organic Revenue fell 1.7% year on year (2.5% in the same quarter last year) Market Capitalization: $24.71 billion Fortive's first quarter results reflected the impact of macroeconomic headwinds and segment-specific challenges, according to management's remarks. CEO Jim Lico pointed to delayed customer investments in the Precision Technologies segment and continued strength in Intelligent Operating Solutions and Advanced Healthcare Solutions. The quarter was further shaped by supply chain adaptations and ongoing efforts to enhance recurring revenue streams. Management also highlighted the transition of Mark Okerstrom as the new CFO, emphasizing his background in disciplined capital allocation and growth acceleration. Looking forward, management cited heightened uncertainty from recently announced tariffs and evolving global demand patterns as key factors behind the lowered full-year guidance. Lico described the company's approach as 'pragmatic,' noting plans to accelerate existing supply chain localization and implement strategic price increases to offset cost pressures. The leadership team acknowledged that full mitigation of tariff impacts will phase in gradually, targeting full offset by the fourth quarter. These evolving dynamics, alongside the planned separation of Ralliant, are expected to significantly influence Fortive's performance in the remainder of the year. Management identified several factors shaping quarterly results and future expectations, with the most pronounced variance coming from the Precision Technologies segment and the evolving policy environment. Precision Technologies Slowdown: The Precision Technologies segment experienced an 8.4% core revenue decline, attributed to delayed customer orders in Test and Measurement due to macroeconomic and policy uncertainty. Management reported that semiconductor and electronics customers, facing tariff-related uncertainties, opted to pause investments, particularly in China and Western Europe. Intelligent Operating Solutions Resilience: Intelligent Operating Solutions delivered core revenue growth, supported by stable industrial demand in North America and new product introductions in solar and data center markets. Management credited software and services expansion for supporting margins in this segment. Advanced Healthcare Solutions Steady: The Advanced Healthcare Solutions segment achieved core revenue growth, though margins contracted slightly due to unfavorable foreign exchange and investment in new product development. Management cited Provation's strong software sales and stable demand for infection prevention products as key contributors. Tariff Mitigation Playbook: Fortive outlined a multi-pronged response to new tariffs, including pricing actions, supply chain localization, and accelerated manufacturing shifts out of China. The company estimates that approximately two-thirds of mitigation will come from price increases, with the remainder from operational adjustments, aiming for full offset by the fourth quarter of this year. Leadership Transition and Separation Progress: The company welcomed Mark Okerstrom as CFO and reaffirmed its plan to complete the Ralliant separation by the end of the second quarter. Management views the separation as a catalyst for focused growth strategies in both resulting entities. For the remainder of the year, Fortive's outlook is shaped by ongoing supply chain localization efforts, the timing of tariff mitigation, and evolving demand trends across its major segments. Tariff Countermeasures Execution: Management expects that the effectiveness and speed of tariff mitigation—including price adjustments and regional manufacturing shifts—will be the central driver of margin recovery in the coming quarters. Segment-Specific Demand Patterns: The company anticipates continued stable performance in Intelligent Operating Solutions and Advanced Healthcare Solutions, while recovery in Precision Technologies is expected to be gradual, influenced by R&D investment cycles and customer responses to policy changes. Separation of Ralliant: The upcoming spin-off of Ralliant is positioned as a significant event, with the potential to unlock value and enable more targeted growth and capital allocation strategies for both Fortive and the new entity. Scott Davis (Melius Research): Asked about the specifics of supply chain localization in response to tariffs. Management clarified that the strategy involves accelerating existing moves rather than building entirely new capacity, emphasizing flexibility across regions. Steve Tusa (JPMorgan): Inquired why the Test and Measurement segment is experiencing greater volatility compared to the broader economy. CEO Jim Lico explained that delayed R&D investments and customer uncertainty, especially among semiconductor and electronics companies, are the main factors. Julian Mitchell (Barclays): Sought clarification on the cadence of tariff headwinds and margin progression in Q2. Management confirmed that margin dilution from tariffs will be most acute in Q2, with improvement expected as mitigation measures phase in through the year. Joe Giordano (TD Cowen): Asked about competitive positioning in manufacturing, particularly for Tektronix, and the impact of price adjustments on competitive dynamics. Management highlighted global manufacturing flexibility and ongoing efforts to protect intellectual property through geographic diversification. Deane Dray (RBC Capital Markets): Questioned cost management actions in Precision Technologies amid headwinds. Management indicated proactive restructuring and ongoing evaluation of incremental cost reductions, but stressed that pricing actions and tariff mitigation are higher priorities for margin stability. In the quarters ahead, the StockStory team will closely monitor (1) the pace and effectiveness of tariff mitigation measures, particularly the rollout of price increases and supply chain adjustments; (2) the trajectory of demand recovery in the Precision Technologies segment, especially customer investment cycles in semiconductor and electronics markets; and (3) progress on the Ralliant separation and subsequent updates on strategic priorities for both Fortive and the spun-off entity. The impact of new product launches and expansion into high-growth markets will also be critical markers of execution. Fortive currently trades at a forward P/E ratio of 17.8×. Should you load up, cash out, or stay put? See for yourself in our free research report. The market surged in 2024 and reached record highs after Donald Trump's presidential victory in November, but questions about new economic policies are adding much uncertainty for 2025. While the crowd speculates what might happen next, we're homing in on the companies that can succeed regardless of the political or macroeconomic environment. Put yourself in the driver's seat and build a durable portfolio by checking out our Top 6 Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 176% over the last five years. Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-micro-cap company Kadant (+351% five-year return). Find your next big winner with StockStory today. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
26-04-2025
- Business
- Yahoo
Is Fortive Corporation (NYSE:FTV) Potentially Undervalued?
Let's talk about the popular Fortive Corporation (NYSE:FTV). The company's shares saw a double-digit share price rise of over 10% in the past couple of months on the NYSE. While good news for shareholders, the company has traded much higher in the past year. As a large-cap stock with high coverage by analysts, you could assume any recent changes in the company's outlook is already priced into the stock. However, what if the stock is still a bargain? Let's take a look at Fortive's outlook and value based on the most recent financial data to see if the opportunity still exists. This technology could replace computers: discover the 20 stocks are working to make quantum computing a reality. Great news for investors – Fortive is still trading at a fairly cheap price. Our valuation model shows that the intrinsic value for the stock is $99.12, which is above what the market is valuing the company at the moment. This indicates a potential opportunity to buy low. Although, there may be another chance to buy again in the future. This is because Fortive's beta (a measure of share price volatility) is high, meaning its price movements will be exaggerated relative to the rest of the market. If the market is bearish, the company's shares will likely fall by more than the rest of the market, providing a prime buying opportunity. View our latest analysis for Fortive Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. Although value investors would argue that it's the intrinsic value relative to the price that matter the most, a more compelling investment thesis would be high growth potential at a cheap price. Fortive's earnings over the next few years are expected to increase by 55%, indicating a highly optimistic future ahead. This should lead to more robust cash flows, feeding into a higher share value. Are you a shareholder? Since FTV is currently undervalued, it may be a great time to increase your holdings in the stock. With a positive outlook on the horizon, it seems like this growth has not yet been fully factored into the share price. However, there are also other factors such as financial health to consider, which could explain the current undervaluation. Are you a potential investor? If you've been keeping an eye on FTV for a while, now might be the time to make a leap. Its buoyant future outlook isn't fully reflected in the current share price yet, which means it's not too late to buy FTV. But before you make any investment decisions, consider other factors such as the track record of its management team, in order to make a well-informed buy. In light of this, if you'd like to do more analysis on the company, it's vital to be informed of the risks involved. Case in point: We've spotted 1 warning sign for Fortive you should be aware of. If you are no longer interested in Fortive, you can use our free platform to see our list of over 50 other stocks with a high growth potential. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Sign in to access your portfolio
Yahoo
05-02-2025
- Business
- Yahoo
Has Fortive Corporation (NYSE:FTV) Stock's Recent Performance Got Anything to Do With Its Financial Health?
Fortive's (NYSE:FTV) stock is up by 7.8% over the past three months. We wonder if and what role the company's financials play in that price change as a company's long-term fundamentals usually dictate market outcomes. In this article, we decided to focus on Fortive's ROE. ROE or return on equity is a useful tool to assess how effectively a company can generate returns on the investment it received from its shareholders. Simply put, it is used to assess the profitability of a company in relation to its equity capital. See our latest analysis for Fortive ROE can be calculated by using the formula: Return on Equity = Net Profit (from continuing operations) ÷ Shareholders' Equity So, based on the above formula, the ROE for Fortive is: 8.4% = US$889m ÷ US$11b (Based on the trailing twelve months to September 2024). The 'return' is the yearly profit. One way to conceptualize this is that for each $1 of shareholders' capital it has, the company made $0.08 in profit. We have already established that ROE serves as an efficient profit-generating gauge for a company's future earnings. Depending on how much of these profits the company reinvests or "retains", and how effectively it does so, we are then able to assess a company's earnings growth potential. Generally speaking, other things being equal, firms with a high return on equity and profit retention, have a higher growth rate than firms that don't share these attributes. When you first look at it, Fortive's ROE doesn't look that attractive. A quick further study shows that the company's ROE doesn't compare favorably to the industry average of 14% either. Although, we can see that Fortive saw a modest net income growth of 11% over the past five years. So, the growth in the company's earnings could probably have been caused by other variables. For instance, the company has a low payout ratio or is being managed efficiently. Next, on comparing with the industry net income growth, we found that Fortive's reported growth was lower than the industry growth of 15% over the last few years, which is not something we like to see. Earnings growth is an important metric to consider when valuing a stock. The investor should try to establish if the expected growth or decline in earnings, whichever the case may be, is priced in. Doing so will help them establish if the stock's future looks promising or ominous. What is FTV worth today? The intrinsic value infographic in our free research report helps visualize whether FTV is currently mispriced by the market. In Fortive's case, its respectable earnings growth can probably be explained by its low three-year median payout ratio of 13% (or a retention ratio of 87%), which suggests that the company is investing most of its profits to grow its business. Besides, Fortive has been paying dividends over a period of nine years. This shows that the company is committed to sharing profits with its shareholders. Our latest analyst data shows that the future payout ratio of the company is expected to drop to 8.4% over the next three years. As a result, the expected drop in Fortive's payout ratio explains the anticipated rise in the company's future ROE to 14%, over the same period. In total, it does look like Fortive has some positive aspects to its business. Specifically, its fairly high earnings growth number, which no doubt was backed by the company's high earnings retention. Still, the low ROE means that all that reinvestment is not reaping a lot of benefit to the investors. With that said, the latest industry analyst forecasts reveal that the company's earnings are expected to accelerate. To know more about the company's future earnings growth forecasts take a look at this free report on analyst forecasts for the company to find out more. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Sign in to access your portfolio
