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Fortive (FTV) Up 30.1% in the Past Year: Will the Rally Last?
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Fortive Corporation (FTV - Free Report) stock is continuing its upward trajectory, with a gain of 30.1% in the past year compared with the sub-industry's growth of 17.5%.
Headquartered in Everett, WA, Fortive Corporation is a diversified industrial growth company. It provides essential technologies for connected workflow solutions on a global basis. Going ahead, the company aims to tackle the overall cyclicality of its businesses by investing in multiyear megatrends, like automation, digitization and electrification.
Image Source: Zacks Investment Research
The company carries a Zacks Rank #2 (Buy) at present.
Catalysts Behind the Price Surge
The company’s performance is being driven by momentum in its portfolio of businesses, especially continued strength in software and other recurring revenue businesses. It remains focused on improving the Fortive Business System to drive innovation and sustainable results.
Fortive's Intelligent Operating Solutions segment performance is being driven by steady POS and industrial demand coupled with new logo software and recurring bookings growth. Momentum in power, food & beverages, and aerospace and defense markets is driving revenues for the Precision Technologies’ segment.
Advanced Healthcare Solutions’ business is gaining from traction in consumables, higher SaaS solutions uptake and new logos’ activity.
Frequent product launches and synergies from strategic acquisitions are pivotal in driving top-line growth. Management highlighted that the company witnessed a 33% increase in revenue attainment on new product launches in 2023.
FTV completed the acquisition of EA Elektro-Automatik Holding GmbH on Jan 3, 2024. It is a leading company of high-power electronic testing solutions for energy storage, mobility, hydrogen and renewable energy applications. This buyout is expected to boost the market share of FTV in electronic test and measurement solutions within the Precision Technologies business segment.
Upbeat Outlook
Fortive provided upbeat guidance for 2024. Management projects adjusted net earnings to be between $3.73 per share and $3.85 per share.
Revenues are anticipated to be between $6.425 billion and $6.525 billion, indicating 6-8% growth from the year-ago levels.
Core revenue growth is suggested to be between 2% and 4%. Free cash flow is forecast to be $1.375 billion.
Adjusted operating profit is envisioned in the range of $1.725-$1.775 billion, suggesting 10-13% growth from the prior-year levels.
Few Headwinds Persist
Industrial OEM weakness and normalizing demand trends in China remain an overhang on the Precision Technologies segment’s performance. Global macro weakness coupled with a leveraged balance sheet is an added concern.
As of Dec 31, 2023, cash and cash equivalents were $1.889 billion, while long-term debt totaled $3.097 billion.
A Look at Estimates
FTV’s EPS is expected to increase 10.2% and 9.5% from the year-ago levels to $3.78 and $4.13 in 2024 and 2025, respectively.
In the past 60 days, earnings estimates for 2024 and 2025 have improved 3.8% and 2.7%, respectively. The long-term earnings growth rate stands at 8.4%.
The company’s revenues for 2024 and 2025 are projected to rise 7% and 4.9% to $6.49 billion and $6.81 billion, respectively.
Other Stocks to Consider
Some other top-ranked stocks worth consideration in the broader technology space are Manhattan Associates (MANH - Free Report) , Watts Water Technologies (WTS - Free Report) and Microsoft (MSFT - Free Report) . While Manhattan Associates sports a Zacks Rank #1 (Strong Buy), Watts Water and Microsoft carry a Zacks Rank of 2, at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for MANH’s 2024 EPS has increased 3.6% in the past 60 days to $3.76. Manhattan Associates’ earnings beat the Zacks Consensus Estimate in each of the last four quarters, the average surprise being 27.6%. Shares of MANH have surged 79.4% in the past year.
The Zacks Consensus Estimate for Watts Water’s 2024 EPS has improved 3.1% to $8.56 in the past 60 days. The long-term earnings growth rate is pegged at 7.8%. Shares of WTS have jumped 21.3% in the past year.
The Zacks Consensus Estimate for Microsoft’s fiscal 2024 EPS is pegged at $11.63, indicating growth of 18.6% from the year-ago levels. Microsoft’s earnings beat the Zacks Consensus Estimate in each of the last four quarters, the average surprise being 8.8%. The long-term earnings growth rate is pegged at 16.2%. MSFT has gained 59.2% in the past year.
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Fortive (FTV) Up 30.1% in the Past Year: Will the Rally Last?
Fortive Corporation (FTV - Free Report) stock is continuing its upward trajectory, with a gain of 30.1% in the past year compared with the sub-industry's growth of 17.5%.
Headquartered in Everett, WA, Fortive Corporation is a diversified industrial growth company. It provides essential technologies for connected workflow solutions on a global basis. Going ahead, the company aims to tackle the overall cyclicality of its businesses by investing in multiyear megatrends, like automation, digitization and electrification.
Image Source: Zacks Investment Research
The company carries a Zacks Rank #2 (Buy) at present.
Catalysts Behind the Price Surge
The company’s performance is being driven by momentum in its portfolio of businesses, especially continued strength in software and other recurring revenue businesses. It remains focused on improving the Fortive Business System to drive innovation and sustainable results.
Fortive's Intelligent Operating Solutions segment performance is being driven by steady POS and industrial demand coupled with new logo software and recurring bookings growth. Momentum in power, food & beverages, and aerospace and defense markets is driving revenues for the Precision Technologies’ segment.
Advanced Healthcare Solutions’ business is gaining from traction in consumables, higher SaaS solutions uptake and new logos’ activity.
Frequent product launches and synergies from strategic acquisitions are pivotal in driving top-line growth. Management highlighted that the company witnessed a 33% increase in revenue attainment on new product launches in 2023.
FTV completed the acquisition of EA Elektro-Automatik Holding GmbH on Jan 3, 2024. It is a leading company of high-power electronic testing solutions for energy storage, mobility, hydrogen and renewable energy applications. This buyout is expected to boost the market share of FTV in electronic test and measurement solutions within the Precision Technologies business segment.
Upbeat Outlook
Fortive provided upbeat guidance for 2024. Management projects adjusted net earnings to be between $3.73 per share and $3.85 per share.
Revenues are anticipated to be between $6.425 billion and $6.525 billion, indicating 6-8% growth from the year-ago levels.
Core revenue growth is suggested to be between 2% and 4%. Free cash flow is forecast to be $1.375 billion.
Adjusted operating profit is envisioned in the range of $1.725-$1.775 billion, suggesting 10-13% growth from the prior-year levels.
Few Headwinds Persist
Industrial OEM weakness and normalizing demand trends in China remain an overhang on the Precision Technologies segment’s performance. Global macro weakness coupled with a leveraged balance sheet is an added concern.
As of Dec 31, 2023, cash and cash equivalents were $1.889 billion, while long-term debt totaled $3.097 billion.
A Look at Estimates
FTV’s EPS is expected to increase 10.2% and 9.5% from the year-ago levels to $3.78 and $4.13 in 2024 and 2025, respectively.
In the past 60 days, earnings estimates for 2024 and 2025 have improved 3.8% and 2.7%, respectively. The long-term earnings growth rate stands at 8.4%.
The company’s revenues for 2024 and 2025 are projected to rise 7% and 4.9% to $6.49 billion and $6.81 billion, respectively.
Other Stocks to Consider
Some other top-ranked stocks worth consideration in the broader technology space are Manhattan Associates (MANH - Free Report) , Watts Water Technologies (WTS - Free Report) and Microsoft (MSFT - Free Report) . While Manhattan Associates sports a Zacks Rank #1 (Strong Buy), Watts Water and Microsoft carry a Zacks Rank of 2, at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for MANH’s 2024 EPS has increased 3.6% in the past 60 days to $3.76. Manhattan Associates’ earnings beat the Zacks Consensus Estimate in each of the last four quarters, the average surprise being 27.6%. Shares of MANH have surged 79.4% in the past year.
The Zacks Consensus Estimate for Watts Water’s 2024 EPS has improved 3.1% to $8.56 in the past 60 days. The long-term earnings growth rate is pegged at 7.8%. Shares of WTS have jumped 21.3% in the past year.
The Zacks Consensus Estimate for Microsoft’s fiscal 2024 EPS is pegged at $11.63, indicating growth of 18.6% from the year-ago levels. Microsoft’s earnings beat the Zacks Consensus Estimate in each of the last four quarters, the average surprise being 8.8%. The long-term earnings growth rate is pegged at 16.2%. MSFT has gained 59.2% in the past year.