Connected Mobility, Convenience Retail And Fueling Will Deliver Resilient Performance

AN
AnalystConsensusTarget
Consensus Narrative from 10 Analysts
Published
29 Aug 24
Updated
04 Aug 25
AnalystConsensusTarget's Fair Value
US$47.35
13.0% undervalued intrinsic discount
04 Aug
US$41.20
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1Y
25.6%
7D
3.2%

Author's Valuation

US$47.3

13.0% undervalued intrinsic discount

AnalystConsensusTarget Fair Value

Last Update04 Aug 25
Fair value Increased 6.27%

Despite slightly reduced revenue growth expectations, an improved net profit margin has contributed to analysts raising Vontier’s consensus price target from $44.55 to $47.34.


What's in the News


  • Vontier issued Q3 2025 total sales guidance of $745–$755 million, with core sales expected approximately flat at the midpoint.
  • The company repurchased 1,442,291 shares for $50.69 million between March 29 and July 31, completing its announced buyback with a total of 25,542,291 shares repurchased for $773.15 million (16.06%).
  • Raised FY2025 guidance to total sales of $3,020–$3,070 million, with core sales midpoint approximately +2%.
  • Teletrac Navman and Vontier launched the Multi IQ Camera, an AI-enabled, cloud-based dashcam system with multi-camera integration for enhanced fleet safety and operational insight.

Valuation Changes


Summary of Valuation Changes for Vontier

  • The Consensus Analyst Price Target has risen from $44.55 to $47.34.
  • The Consensus Revenue Growth forecasts for Vontier has fallen from 4.6% per annum to 4.2% per annum.
  • The Net Profit Margin for Vontier has risen slightly from 15.24% to 15.89%.

Key Takeaways

  • Vontier's focus on connected mobility and convenience retail ensures stable demand and revenue growth despite economic challenges.
  • Strategic share repurchases and supply chain optimizations strengthen earnings per share and safeguard net margins.
  • Macroeconomic uncertainties and tariff impacts pose risks to Vontier's revenue and margins, while inflation challenges could affect earnings and capital planning.

Catalysts

About Vontier
    Provides mobility ecosystem solutions worldwide.
What are the underlying business or industry changes driving this perspective?
  • Vontier's connected mobility strategy and focus on convenience retail and fueling markets, a sector resilient to economic downturns, position the company for consistent demand and potential revenue growth.
  • The implementation of supply chain optimization initiatives and tariff mitigation strategies to reduce exposure, particularly from China, should help improve net margins by keeping costs in check.
  • Vontier's strategic share repurchases, with over half of the 2025 free cash flow expected to support buybacks, aim to enhance earnings per share significantly.
  • Ongoing self-help initiatives, such as the 80/20 product line simplification and strategic pricing optimizations, are likely to boost net margins by streamlining operations and enhancing productivity.
  • Expansion in high-growth areas, such as the Mobility Technologies segment with digital solutions like Invenco's payment systems and Drive's fleet management software, are expected to drive revenue growth and improve operating profit margins.

Vontier Earnings and Revenue Growth

Vontier Future Earnings and Revenue Growth

Assumptions

How have these above catalysts been quantified?
  • Analysts are assuming Vontier's revenue will grow by 4.6% annually over the next 3 years.
  • Analysts assume that profit margins will increase from 12.6% today to 15.2% in 3 years time.
  • Analysts expect earnings to reach $517.8 million (and earnings per share of $3.61) by about July 2028, up from $373.3 million today.
  • In order for the above numbers to justify the analysts price target, the company would need to trade at a PE ratio of 14.4x on those 2028 earnings, down from 15.8x today. This future PE is lower than the current PE for the US Electronic industry at 24.2x.
  • Analysts expect the number of shares outstanding to decline by 3.77% per year for the next 3 years.
  • To value all of this in today's terms, we will use a discount rate of 8.54%, as per the Simply Wall St company report.

Vontier Future Earnings Per Share Growth

Vontier Future Earnings Per Share Growth

Risks

What could happen that would invalidate this narrative?
  • Continued macro uncertainty could negatively impact demand in Vontier's key markets, posing risks to revenue growth in the second half of the year.
  • The tariff impact, particularly from China, estimated to be $50 million, could affect net margins if mitigation efforts such as diversification and pricing actions do not fully offset these costs.
  • The Repair Solutions segment faces challenges due to inflation and declining consumer sentiment, which might lead to a decrease in large ticket item purchases and impact Vontier's overall earnings.
  • Despite healthy demand signals, there remains a risk of hesitancy in customers' capital planning and scheduling, which could delay projects and affect revenue recognition within the Environmental & Fueling Solutions segment.
  • There is a cautious outlook on volume growth given the macro context, and reliance on pricing to offset potential volume declines might not be sustainable, which could pressure operating margins.

Valuation

How have all the factors above been brought together to estimate a fair value?
  • The analysts have a consensus price target of $44.55 for Vontier based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $50.0, and the most bearish reporting a price target of just $40.0.
  • In order for you to agree with the analyst's consensus, you'd need to believe that by 2028, revenues will be $3.4 billion, earnings will come to $517.8 million, and it would be trading on a PE ratio of 14.4x, assuming you use a discount rate of 8.5%.
  • Given the current share price of $39.93, the analyst price target of $44.55 is 10.4% higher.
  • We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.

How well do narratives help inform your perspective?

Disclaimer

AnalystConsensusTarget is a tool utilizing a Large Language Model (LLM) that ingests data on consensus price targets, forecasted revenue and earnings figures, as well as the transcripts of earnings calls to produce qualitative analysis. The narratives produced by AnalystConsensusTarget are general in nature and are based solely on analyst data and publicly-available material published by the respective companies. These scenarios are not indicative of the company's future performance and are exploratory in nature. Simply Wall St has no position in the company(s) mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The price targets and estimates used are consensus data, and do not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that AnalystConsensusTarget's analysis may not factor in the latest price-sensitive company announcements or qualitative material.

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