Now trading at a price of $71.83, Fortive has moved 3.4% so far today.
Fortive returned gains of 29.3% last year, with its stock price reaching a high of $71.93 and a low of $52.47. Over the same period, the stock outperformed the S&P 500 index by 10.0%. More recently, the company's 50-day average price was $65.84. Fortive Corporation designs, develops, manufactures, markets, and services professional and engineered products, software, and services worldwide. Based in Everett, WA, the large-cap Industrials company has 18,000 full time employees. Fortive has offered a 0.4% dividend yield over the last 12 months.
The Company's Revenues Are Declining:
| 2019-12-31 | 2020-12-31 | 2021-12-31 | 2022-12-31 | |
|---|---|---|---|---|
| Revenue (MM) | $7,320 | $4,634 | $5,255 | $5,826 |
| Gross Margins | 50.3% | 56.3% | 57.2% | 57.7% |
| Operating Margins | 13.7% | 11.6% | 15.5% | 17.3% |
| Net Margins | 10.09% | 34.81% | 11.58% | 12.96% |
| Net Income (MM) | $739 | $1,613 | $608 | $755 |
| Net Interest Expense (MM) | -164 | -148 | -103 | -98 |
| Net Interest Expense (MM) | -$164 | -$148 | -$103 | -$98 |
| Depreciation & Amort. (MM) | -$426 | -$384 | -$396 | -$466 |
| Earnings Per Share | $1.97 | $4.49 | $1.63 | $2.14 |
| EPS Growth | n/a | 127.92% | -63.7% | 31.29% |
| Diluted Shares (MM) | 340 | 359 | 352 | 353 |
| Free Cash Flow (MM) | $1,159 | $1,361 | $911 | $1,207 |
| Capital Expenditures (MM) | -$112 | -$76 | -$50 | -$96 |
| Net Current Assets (MM) | -$6,350 | -$2,632 | -$4,434 | -$3,725 |
| Current Ratio | 1.06 | 1.55 | 0.68 | 0.91 |
| Long Term Debt (MM) | $4,828 | $2,830 | $1,807 | $2,252 |
| Net Debt / EBITDA | 3.5 | 1.11 | 2.72 | 1.77 |
Fortive benefits from a steady stream of strong cash flows, wider gross margins than its peer group, and average operating margins with a positive growth rate. The company's financial statements show positive EPS growth and healthy leverage. However, the firm has declining revenues and decreasing reinvestment in the business.
A Lower P/B Ratio Than Its Sector Average but Trades Above Its Graham Number:
Fortive has a trailing twelve month P/E ratio of 30.8, compared to an average of 20.49 for the Industrials sector. Based on its EPS guidance of $3.67, the company has a forward P/E ratio of 17.9. Fortive's PEG ratio is 3.31 on the basis of the 9.3% weighted average of the company and the broader market's EPS compound average growth rates. This suggests that the company's shares are overvalued. In contrast, the market is likely undervaluing Fortive in terms of its equity because its P/B ratio is 2.57 while the sector average is 3.78. The company's shares are currently trading 79.1% above their Graham number. In conclusion, Fortive's impressive cash flow trend, decent P/B ratio, and reasonable use of leverage demonstrate that the company may still be fairly valued — despite its elevated earnings multiple.
Fortive Has an Average Rating of Buy:
The 15 analysts following Fortive have set target prices ranging from $63.0 to $87.0 per share, for an average of $73.74 with a buy rating. As of April 2023, the company is trading -10.7% away from its average target price, indicating that there is an analyst consensus of some upside potential.
Fortive has a very low short interest because 1.7% of the company's shares are sold short. Institutions own 95.9% of the company's shares, and the insider ownership rate stands at 0.23%, suggesting a small amount of insider investors. The largest shareholder is the Vanguard Group, Inc., whose 11% stake in the company is worth $2,853,512,978.
