Fortive Corporation’s Stock Struggles Despite Steady Fundamentals
A Closer Look at Fortive’s Performance and Market Position
Fortive Corporation (FTV), with a market cap of $26.7 billion, is recognized as a diversified industrial growth company. This Everett, Washington-based firm provides industrial technology and professional instrumentation solutions on a global scale. Its operations are organized into three main segments: Intelligent Operating Solutions, Precision Technologies, and Advanced Healthcare Solutions.
As a “large-cap” stock, defined as those valued at $10 billion or more, Fortive encompasses a broad range of advanced software, services, and engineered products. Its offerings are marketed under respected brands such as FLUKE, TEKTRONIX, and ASP, catering to diverse industries including healthcare, manufacturing, aerospace, and energy.
Recently, however, Fortive’s stock has seen a decline of 11.6% from its 52-week high of $87.10 reached in March. In the last three months, FTV shares have only increased by 4.4%, which is considerably less than the Invesco AI and Next Gen Software ETF (IGPT), which gained 10.1% in the same period.
Looking at the year-to-date (YTD) performance, Fortive has posted a modest gain of 4.5%, which pales in comparison to IGPT’s impressive 24% rise. Over the past 52 weeks, FTV shares have rallied 6.8%, while IGPT has seen a robust return of 27.3%.
Despite these challenges, FTV has remained above its 50-day and 200-day moving averages since late November, signaling resilience in certain areas.
The difficulties Fortive faces stem from several sources. Issues in key markets, notably China, delays in government spending, and disappointing results in the Intelligent Operating Solutions segment have contributed to its underperformance. In its recent Q3 report, Fortive announced an adjusted EPS of $0.97, which beat expectations. However, the stock fell 3.4% on October 30 after revenue of $1.5 billion failed to meet the consensus estimate. Additionally, challenges in the Precision Technologies segment included a minor revenue decline compared to the previous year and a contraction in margins. The company’s updated revenue guidance of $6.2 billion to $6.3 billion also fell short of market expectations, leading to increased concern among investors.
In contrast, rival Cognex Corporation (CGNX) has faced its own challenges, experiencing a 9.8% decline YTD and a nearly 10% fall over the past year, making Fortive’s performance appear more stable by comparison.
Despite the recent struggles, analysts maintain cautious optimism regarding Fortive’s future. A consensus rating of “Moderate Buy” is held by the 17 analysts covering the stock. Currently, FTV is trading below the average price target of $86.50.
On the date of publication, Sohini Mondal did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information, please view the Barchart Disclosure Policy here.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
