The industrial technology conglomerate Fortive Corp. (FTV) delivered better-than-expected quarterly earnings and revenue in the second quarter.
The company reported revenues of $1.3 billion, which surpassed the Street’s estimates of $1.28 billion and jumped 26.7% from the year-ago period, reflecting broad-based strength across the company’s portfolio.
Earnings came in at $0.66 per share, increasing 53.5% year-over-year and outpaced the consensus estimates of $0.59 per share.
Fortive CEO James A. Lico said, “We are excited about our recently announced acquisition of ServiceChannel. The transaction adds another differentiated, high-growth SaaS asset with an attractive runway to drive increasing profitability and free cash flow, and generate strong returns over the next five years.” (See FTV stock charts on TipRanks)
For Q3, Fortive anticipates adjusted earnings to come in the range of $0.62 to $0.66 per share.
On July 13, Rosenblatt Securities analyst Scott Graham reiterated a Hold rating on the stock with a price target of $72 (4.3% upside potential).
Graham commented, “The ServiceChannel acquisition will do little for earnings and hurt ROIC in the intermediate term, in our estimation. But we like the business and earnings accretion should build longer term with sales … and we believe FTV’s facilities management software platform — which will be $500M with ServiceChannel — can be scaled in what management believes is a $100B TAM (not SAM).”
The Wall Street community is cautiously optimistic about the stock with a Moderate Buy consensus rating based on 7 Buys and 5 Holds. The average FTV price target of $80.82 implies 17.1% upside potential from current levels.
Fortive scores a 7 of 10 from TipRanks’ Smart Score rating system, indicating that the stock is likely to perform in line with market averages.
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