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RBC Capital lowered its price target on Fortive stock (NYSE: NYSE:FTV) to $75.00 from $79.00 on Tuesday, while maintaining a Sector Perform rating on the shares ahead of the company’s planned separation. According to InvestingPro data, Fortive currently trades at a P/E ratio of 31.5x and shows strong financial health with impressive gross profit margins of nearly 60%.
The industrial technology company, currently valued at $24.5 billion, hosted a two-part New York City analyst meeting focusing on both New-Fortive (FTV) and its upcoming spinoff, Ralliant (RAL), a test and measurement/sensors pureplay business. The separation is scheduled to take place on June 28. Get deeper insights into this corporate action and access comprehensive analysis with InvestingPro, which offers exclusive ProTips and detailed financial metrics for informed investment decisions.
The analyst meeting highlighted New-Fortive’s investment potential, emphasizing its high earnings quality with 50% recurring revenues. Discussions also covered Ralliant’s short-cycle/cyclical mix focused on aerospace and defense, utilities, and datacenters.
RBC Capital noted that both companies will inherit Danaher (NYSE:DHR) Business System DNA, and their medium-term targets appear "mostly reasonable/achievable." The companies aim to establish a pattern of under-promising and over-delivering under their new management teams.
The firm indicated investors might take a "show-me" approach toward Ralliant given its "recent operating choppiness," suggesting some caution about the spinoff’s near-term performance.
In other recent news, Fortive Corporation has outlined its growth strategy following the spin-off of Ralliant Corporation, scheduled for June 28, 2025. During its 2025 Investor Day, Fortive reaffirmed its Q2 2025 guidance, projecting diluted net earnings per share between $0.44 and $0.49 and adjusted diluted net earnings per share between $0.85 and $0.90. The company has also expanded its share repurchase program, adding approximately 15.63 million shares, and introduced a special repurchase initiative worth up to $550 million. This move is funded by a pre-separation cash dividend from Ralliant and reflects Fortive’s commitment to shareholder value. Additionally, RBC Capital Markets has increased Fortive’s stock price target to $79 while maintaining a Sector Perform rating. Meanwhile, JPMorgan continues to hold an Overweight rating on Fortive with a price target of $87, highlighting the company’s strong portfolio of niche industrial businesses. Fortive has appointed Neill Reynolds as CFO of Ralliant Corporation, effective June 2, 2025, as part of its leadership transition. These developments are part of Fortive’s strategic efforts to enhance growth and profitability following the spin-off.
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