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Fortive (FTV) Reaffirms 2023 Guidance, Provides 2028 Targets

Fortive Corporation FTV has reiterated its guidance for the second quarter of 2023 and the full year during its 2023 investor day. The company has also provided its long-term financial targets for 2028.

For the second quarter, management expects adjusted net earnings in the range of 78-82 cents per share. Revenues are projected in the band of $1.48-$1.515 billion. The company estimates adjusted operating profit to be in the range of $363 million to $378 million. Adjusted operating profit margin is expected to be 24.5% to 25%.

For 2023, Fortive expects adjusted net earnings in the range of $3.29-$3.40 per share. Revenues are anticipated in the range of $6-$6.1 billion. The company projects the adjusted operating margin to be between 25% and 25.5%.

Fortive Corporation Price and Consensus

Fortive Corporation Price and Consensus
Fortive Corporation Price and Consensus

Fortive Corporation price-consensus-chart | Fortive Corporation Quote

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The company plans to further grow its business using a five-way strategy. It plans to expand its market position in line with secular growth trends. FTV has transitioned its software offering in line with the growing demand for artificial intelligence and machine learning.

The company plans to utilize its innovation capabilities to improve core growth. It expects software and recurring revenues to grow in the range of 45-50% and 20%, respectively, from 2023 to 2028.

The company 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.

It focuses on improving the Fortive Business System to drive innovation and sustainable results. Lastly, the company keeps on re-investing to enjoy the benefits of compounding.

Owing to the above-mentioned factors, Fortive expects adjusted net earnings to grow to $4.50 by 2025 and $6.75 by 2028 from $3.15 per share in 2022. Similarly, the company expects revenues to grow to $6.7 billion by 2025 and $8 billion by 2028 from $5.8 billion in 2022. It expects free cash flow to grow to $1.6 billion by 2025 and $2.3 billion by 2028 from $1.2 billion in 2022.

Fortive is a diversified industrial growth company that provides industrial technology and professional instrumentation 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.

Fortive currently has a Zacks Rank #3 (Hold). Shares of the company have gained 5% in the past year compared with the sub-industry’s rise of 4.9%.

Zacks Investment Research
Zacks Investment Research


Image Source: Zacks Investment Research

Stocks to Consider

Some better-ranked stocks in the broader technology space are Dropbox DBX, Badger Meter BMI and Blackbaud BLKB. Dropbox sports a Zacks Rank #1 (Strong Buy), whereas Badger Meter and Blackbaud hold a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Dropbox’s 2023 earnings has increased 10.1% in the past 60 days to $1.85 per share. The long-term earnings growth rate is anticipated to be 12.3%.

Dropbox’s earnings beat the Zacks Consensus Estimate in the last four quarters, the average being 10.4%. Shares of DBX have gained 11% in the past year.

The Zacks Consensus Estimate for Badger Meter’s 2023 earnings has increased 4.7% in the past 60 days to $2.69 per share.

Badger Meter’s earnings beat the Zacks Consensus Estimate in all the last four quarters, the average being 5.3%. Shares of BMI have surged 83.6% in the past year.

The Zacks Consensus Estimate for Blackbaud’s 2023 earnings has increased 7.3% in the past 60 days to $3.68 per share.

Blackbaud’s earnings beat the Zacks Consensus Estimate in the last four quarters, the average surprise being 10.4%. Shares of the company have jumped 17% in the past year

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Fortive Corporation (FTV) : Free Stock Analysis Report

Dropbox, Inc. (DBX) : Free Stock Analysis Report

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