Update shared on03 Sep 2025
Fair value Decreased 3.97%Analysts have lowered Fortive’s target price to $60.50, citing uncertainty about achieving updated guidance following the Ralliant spin-off, ongoing topline and margin pressures, and diminished visibility post-restructuring.
Analyst Commentary
- Bullish analysts highlight Fortive's high earnings visibility and strong recurring revenue profile (~50%+), expecting portfolio reviews and strategic focus on workflow management software and healthcare to support margin resilience.
- Bearish analysts express concern about the achievability of Fortive’s updated guidance, noting a challenging second-half ramp necessary to meet targets and lack of evidence from peers that supports the company's outlook.
- Several analysts view the recent Ralliant spin-off as value-creating but caution that near-term sales declines and margin pressures at major divisions like Tek could limit upside for both Fortive and Ralliant.
- Some view Fortive's topline reset and flat-to-slightly-down organic growth as a response to tariff-driven pricing pressure and customer concerns over trade, healthcare, and government spending, lowering expectations for the next earnings season.
- Bearish analysts believe the clarity of the post-spin investment thesis is diminished, with deceleration in Fortive’s best business and other segments underperforming, leading them to recommend alternative opportunities for share appreciation.
What's in the News
- Fortive completed the spin-off of its Precision Technologies segment, creating Ralliant Corp., which began trading independently and replaced Wolfspeed in the S&P SmallCap 600; Fortive remains in the S&P 500 (Periodicals, Key Developments).
- Olumide Soroye was appointed CEO of Fortive following the spin-off, replacing James Lico, who will serve as a non-executive senior advisor through year-end (Key Developments).
- Fortive reaffirmed its Q2 2025 earnings guidance, maintaining anticipated diluted net EPS in the range of $0.44 to $0.49 (Key Developments).
- The company remains focused on bolt-on M&A, balancing these opportunities with share repurchases to optimize shareholder returns; Fortive will also adjust its dividend policy post-spin-off, with a commitment to dividend growth (Key Developments).
- Between March and June 2025, Fortive repurchased nearly 1.9 million shares for $134.99 million, completing 7.83% of the buyback program announced in 2022; a separate buyback program announced in May 2025 saw no activity to date, and the quarterly dividend was set at $0.06 per share, payable September 26, 2025 (Key Developments).
Valuation Changes
Summary of Valuation Changes for Fortive
- The Consensus Analyst Price Target has fallen slightly from $63.00 to $60.50.
- The Future P/E for Fortive has fallen slightly from 34.12x to 32.78x.
- The Consensus Revenue Growth forecasts for Fortive remained effectively unchanged, at -9.8% per annum.
Disclaimer
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