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Analyzing Fortive (FTV) Gains 16% YTD: Will the Trend Last?
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Fortive (FTV - Free Report) is witnessing solid momentum, with shares having gained 16% year to date compared with the sub-industry’s growth of 8.9%. With healthy fundamentals, this Zacks Rank #2 (Buy) stock appears to be a solid investment option at the moment.
Fortive is a diversified industrial growth company that offers industrial technology and professional instrumentation solutions. It aims to reduce cyclicality of its businesses by investing in multi-year megatrends, like automation, digitization and electrification, moving forward.
Growth Drivers
Fortive’s performance is benefiting from strong revenue growth across Intelligent Operating Solutions and Precision Technologies business segments. It is also gaining from solid customer demand in all geographies and increased orders for software offerings.
Image Source: Zacks Investment Research
FTV focuses on improving Fortive Business System (FBS) to drive innovation and sustainable results. The company’s industrial and scientific business benefits from iNet expansion and cross-sell activity
FTV has transitioned its software solutions in line with secular growth trends in artificial intelligence and machine learning. It plans to utilize its innovation capabilities to improve core growth. Management expects software and recurring revenues to grow in the range of 45-50% and 20%, respectively, in 2023 and 2028. It also concentrates on enhancing FBS to promote innovation and long-lasting outcomes.
Fortive continues to engage in mergers and acquisitions to expand its market share. The acquisition of eMaint Enterprises by Fortive’s subsidiary, Fluke, and the buyout of Global Traffic Technologies has allowed FTV to enter the rapidly-growing cloud computing market.
Owing to the above-mentioned factors, Fortive expects adjusted net earnings per share to grow to $4.50 by 2025 and to $6.75 by 2028, respectively, from $3.15 in 2022. Similarly, it expects revenues to increase to $6.7 billion by 2025 and to $8 billion by 2028, respectively, from $5.8 billion in 2022.
Nonetheless, global macroeconomic weakness and inflation might affect FTV’s near-term prospects. The company’s healthcare business is affected due to unfavorable forex changes and product mix coupled with lower volume.
A Look at Estimates
FTV’s earnings per share are expected to increase 6.4% and 8.7% on a year-over-year basis to $3.35 and $3.64 in 2023 and 2024, respectively.
The Zacks Consensus Estimate for 2023 earnings has remained unchanged in the past 60 days. The consensus estimate for 2024 earnings is up by 1 cent over the same time frame.
The company’s revenues for 2023 are projected to rise 3.9% to $6.05 billion. For 2024, revenues are anticipated to improve 4.5% to $6.33 billion.
The Zacks Consensus Estimate for Woodward’s fiscal 2023 earnings has increased 0.3% in the past 60 days to $3.59 per share. WWD’s long-term earnings growth rate is anticipated to be 13.5%. Shares of WWD have risen 26.6% in the past year.
The consensus mark for Cadence’s 2023 earnings is pegged at $5.00 per share, unchanged in the past 60 days. The long-term earnings growth rate is anticipated to be 19.5%.
Cadence’s earnings beat the Zacks Consensus Estimate in the last four quarters, the average surprise being 7.3%. Shares of CDNS have increased 48.8% in the past year.
The consensus estimate for Adobe’s fiscal 2023 earnings is pegged at $15.70 per share, up 1.8% in the past 60 days. The long-term earnings growth rate is anticipated to be 13.3%.
Adobe’s earnings beat the Zacks Consensus Estimate in the last four quarters, the average beat being 3.1%. Shares of ADBE have improved 32.4% in the past year.
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Analyzing Fortive (FTV) Gains 16% YTD: Will the Trend Last?
Fortive (FTV - Free Report) is witnessing solid momentum, with shares having gained 16% year to date compared with the sub-industry’s growth of 8.9%. With healthy fundamentals, this Zacks Rank #2 (Buy) stock appears to be a solid investment option at the moment.
Fortive is a diversified industrial growth company that offers industrial technology and professional instrumentation solutions. It aims to reduce cyclicality of its businesses by investing in multi-year megatrends, like automation, digitization and electrification, moving forward.
Growth Drivers
Fortive’s performance is benefiting from strong revenue growth across Intelligent Operating Solutions and Precision Technologies business segments. It is also gaining from solid customer demand in all geographies and increased orders for software offerings.
Image Source: Zacks Investment Research
FTV focuses on improving Fortive Business System (FBS) to drive innovation and sustainable results. The company’s industrial and scientific business benefits from iNet expansion and cross-sell activity
FTV has transitioned its software solutions in line with secular growth trends in artificial intelligence and machine learning. It plans to utilize its innovation capabilities to improve core growth. Management expects software and recurring revenues to grow in the range of 45-50% and 20%, respectively, in 2023 and 2028. It also concentrates on enhancing FBS to promote innovation and long-lasting outcomes.
Fortive continues to engage in mergers and acquisitions to expand its market share. The acquisition of eMaint Enterprises by Fortive’s subsidiary, Fluke, and the buyout of Global Traffic Technologies has allowed FTV to enter the rapidly-growing cloud computing market.
Owing to the above-mentioned factors, Fortive expects adjusted net earnings per share to grow to $4.50 by 2025 and to $6.75 by 2028, respectively, from $3.15 in 2022. Similarly, it expects revenues to increase to $6.7 billion by 2025 and to $8 billion by 2028, respectively, from $5.8 billion in 2022.
Nonetheless, global macroeconomic weakness and inflation might affect FTV’s near-term prospects. The company’s healthcare business is affected due to unfavorable forex changes and product mix coupled with lower volume.
A Look at Estimates
FTV’s earnings per share are expected to increase 6.4% and 8.7% on a year-over-year basis to $3.35 and $3.64 in 2023 and 2024, respectively.
The Zacks Consensus Estimate for 2023 earnings has remained unchanged in the past 60 days. The consensus estimate for 2024 earnings is up by 1 cent over the same time frame.
The company’s revenues for 2023 are projected to rise 3.9% to $6.05 billion. For 2024, revenues are anticipated to improve 4.5% to $6.33 billion.
Other Key Picks
Some other top-ranked stocks in the broader technology space are Woodward (WWD - Free Report) , Cadence Design Technologies (CDNS - Free Report) and Adobe (ADBE - Free Report) . Cadence sports a Zacks Rank #1 (Strong Buy) while each of Woodward and Adobe carry a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Woodward’s fiscal 2023 earnings has increased 0.3% in the past 60 days to $3.59 per share. WWD’s long-term earnings growth rate is anticipated to be 13.5%. Shares of WWD have risen 26.6% in the past year.
The consensus mark for Cadence’s 2023 earnings is pegged at $5.00 per share, unchanged in the past 60 days. The long-term earnings growth rate is anticipated to be 19.5%.
Cadence’s earnings beat the Zacks Consensus Estimate in the last four quarters, the average surprise being 7.3%. Shares of CDNS have increased 48.8% in the past year.
The consensus estimate for Adobe’s fiscal 2023 earnings is pegged at $15.70 per share, up 1.8% in the past 60 days. The long-term earnings growth rate is anticipated to be 13.3%.
Adobe’s earnings beat the Zacks Consensus Estimate in the last four quarters, the average beat being 3.1%. Shares of ADBE have improved 32.4% in the past year.