Company Reports

Narrow-moat-rated Fortive reported solid first-quarter results, as its adjusted EPS of $0.83 came in above management’s guidance range of $0.77-$0.80. Management raised the midpoint of its full-year 2024 outlook and now expects adjusted EPS of $3.77-$3.86, up from $3.73-$3.85 previously. We’ve made some puts and takes in our model, but our $88 fair value estimate is unchanged. We see the name as modestly undervalued, with shares now trading in 4-star territory.

Fortive, spun off from Danaher in 2016, has followed in its former parent’s footsteps and adopted the philosophy underpinning the proven Danaher Business System, which has its roots in the Toyota Production System. The Fortive Business System essentially involves acquiring moatworthy companies, expanding operating margins through Lean manufacturing principles, and redeploying cash flows into further mergers and acquisitions.

Narrow-moat-rated Fortive ended 2023 with a solid fourth quarter, as its full-year revenue of $6,065 million and adjusted EPS of $3.43 both came in above our estimates of $6,047 million and $3.39, respectively. After rolling our model forward one year, we’ve modestly bumped our fair value estimate up to $88 from $87, mostly due to the time value of money.

Fortive, spun off from Danaher in 2016, has followed in its former parent’s footsteps and adopted the philosophy underpinning the proven Danaher Business System, which has its roots in the Toyota Production System. The Fortive Business System essentially involves acquiring moatworthy companies, expanding operating margins through Lean manufacturing principles, and redeploying cash flows into further mergers and acquisitions.

We’ve trimmed our fair value estimate for narrow-moat-rated Fortive to $87 per share from $89 to reflect our slightly more muted near-term revenue growth projections, partially offset by the time value of money. The shares are currently trading at a roughly 26% discount to our fair value estimate, which we see as an attractive entry point.

Fortive, spun off from Danaher in 2016, has followed in its former parent’s footsteps and adopted the philosophy underpinning the proven Danaher Business System, which has its roots in the Toyota Production System. The Fortive Business System essentially involves acquiring moatworthy companies, expanding operating margins through Lean manufacturing principles, and redeploying cash flows into further mergers and acquisitions.

Fortive, spun off from Danaher in 2016, has followed in its former parent’s footsteps and adopted the philosophy underpinning the proven Danaher Business System, which has its roots in the Toyota Production System. The Fortive Business System essentially involves acquiring moatworthy companies, expanding operating margins through Lean manufacturing principles, and redeploying cash flows into further mergers and acquisitions.

We’ve modestly bumped our fair value estimate for narrow-moat-rated Fortive up to $89 from $88 after the company reported its second-quarter earnings. This reflects our slightly more optimistic near-term revenue growth projections as well as time value of money. The stock is currently trading in 4-star territory, which we view as an attractive entry point.

After Fortive’s 2023 investor day on May 25, we’ve increased our fair value estimate to $88 from $86, as we’ve modestly raised our long-term revenue growth and operating margin assumptions. The stock is currently trading in 4-star territory, which we see as an attractive entry point.

Fortive, spun off from Danaher in 2016, has followed in its former parent’s footsteps and adopted the philosophy underpinning the proven Danaher Business System, which has its roots in the Toyota Production System. The Fortive Business System essentially involves acquiring moatworthy companies, expanding operating margins through Lean manufacturing principles, and redeploying cash flows into further mergers and acquisitions.

Fortive, spun off from Danaher in 2016, has followed in its former parent’s footsteps and adopted the philosophy underpinning the proven Danaher Business System, which has its roots in the Toyota Production System. The Fortive Business System essentially involves acquiring moatworthy companies, expanding operating margins through Lean manufacturing principles, and redeploying cash flows into further mergers and acquisitions.

Narrow-moat-rated Fortive started 2023 with a strong first quarter, as its revenue of $1,461 million came in above our $1,421 million estimate. While nothing in Fortive’s earnings release materially alters our long-term outlook, we’ve bumped our fair value estimate up to $86 from $85 due to time value of money. We continue to view the name as modestly undervalued, with the stock currently trading in 4-star territory.

Narrow-moat-rated Fortive ended 2022 with a solid fourth quarter, as its adjusted EPS of $0.88 beat our estimate by $0.03. We’ve made some puts and takes in our model, but our $85 fair value estimate remains unchanged as nothing in Fortive’s fourth-quarter earnings release fundamentally alters our long-term thesis. We see the name as modestly undervalued, with shares currently trading in 4-star territory.

Fortive, spun off from Danaher in 2016, has followed in its former parent’s footsteps and adopted the philosophy underpinning the proven Danaher Business System, which has its roots in the Toyota Production System. The Fortive Business System essentially involves acquiring moatworthy companies, expanding operating margins through Lean manufacturing principles, and redeploying cash flows into further mergers and acquisitions.

Narrow-moat Fortive posted solid third-quarter results, delivering a 20% year-over-year increase in adjusted EPS, to $0.79 from $0.66. We are maintaining our $85 fair value estimate, as nothing in the earnings release materially alters our long-term thesis. We view the stock as modestly undervalued, currently trading in 4-star territory.

Fortive, spun off from Danaher in 2016, has followed in its former parent’s footsteps and adopted the philosophy underpinning the proven Danaher Business System, which has its roots in the Toyota Production System. The Fortive Business System essentially involves acquiring moatworthy companies, expanding operating margins through Lean manufacturing principles, and redeploying cash flows into further mergers and acquisitions.

We are maintaining our $85 fair value estimate for narrow-moat-rated Fortive as nothing in its second-quarter earnings release fundamentally alters our long-term outlook for the company. Fortive overcame supply chain constraints, COVID-19-related lockdowns in China, and foreign exchange headwinds to deliver solid results, with second-quarter adjusted EPS up 18% from the prior-year period. The stock is currently trading in 4-star territory, which we view as an attractive entry point.

Fortive, spun off from Danaher in 2016, has followed in its former parent’s footsteps and adopted the philosophy underpinning the proven Danaher Business System, which has its roots in the Toyota Production System. The Fortive Business System essentially involves acquiring moatworthy companies, expanding operating margins through Lean manufacturing principles, and redeploying cash flows into further mergers and acquisitions.

Fortive, spun off from Danaher in 2016, has followed in its former parent’s footsteps and adopted the philosophy underpinning the proven Danaher Business System, which has its roots in the Toyota Production System. The Fortive Business System essentially involves acquiring moatworthy companies, expanding operating margins through Lean manufacturing principles, and redeploying cash flows into further mergers and acquisitions.

Considering COVID-19-related headwinds and ongoing supply chain disruptions, we think narrow-moat-rated Fortive delivered solid first-quarter results, featuring 5% core revenue growth and an 11% increase in adjusted EPS compared with the same period last year. We’ve trimmed our fair value estimate to $85 from $88, mostly due to slightly more conservative long-term growth assumptions, but continue to see Fortive as undervalued, with shares currently trading in 5-star territory.