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Investing.com - JPMorgan has reiterated an Overweight rating and $65.00 price target on Fortive (NYSE:FTV), highlighting the company as a value opportunity in what it describes as an "clearly expensive Sector." This view aligns with InvestingPro data showing Fortive trading near its 52-week low, with a market capitalization of $18.07 billion and impressive gross profit margins of nearly 60%.
The investment bank adjusted its model to reflect Fortive’s RAL spin-off and the second-quarter update in which management guided organic sales to be flat to slightly down, lower than the previously expected low-single-digit growth. Fortive reportedly experienced slowing demand in late June and saw less tariff-related pricing than previously assumed due to U.S.-China trade de-escalation. InvestingPro analysis reveals several key insights, including management’s aggressive share buyback program and the stock’s currently oversold status based on RSI indicators. Subscribers can access 6 additional ProTips and comprehensive valuation metrics on the platform.
JPMorgan noted these factors likely impacted margins compared to prior expectations, resulting in lowered profit estimates for 2025 and 2026. Despite these adjustments, the firm emphasized Fortive’s nearly 5.5% free cash flow yield as "a standout in a Sector that is now expensive."
The December 2025 price target of $65 reflects approximately a 5% discount on earnings per share and a 10% discount on free cash flow, which JPMorgan considers "conservative" given the quality of Fortive’s assets. The bank believes the market is overly negative on these assets.
JPMorgan’s outlook suggests a 23% upside potential for Fortive stock, which it describes as "best in Sector" and "one of the only value plays left" with potential for price appreciation through re-rating on what could ultimately prove to be more defensive growth on reset numbers. This analysis is supported by InvestingPro’s Fair Value assessment, which indicates the stock is currently undervalued, while maintaining a healthy free cash flow yield of 8% and a P/E ratio of 23.13. For detailed insights and comprehensive analysis, investors can access the full Pro Research Report, available exclusively to subscribers.
In other recent news, Fortive Corporation has completed the spin-off of its Precision Technologies segment, resulting in the creation of Ralliant Corporation, which is now trading on the New York Stock Exchange under the symbol "RAL." Fortive shareholders received one share of Ralliant for every three shares of Fortive held. Concurrent with the spin-off, Olumide Soroye has taken over as President and CEO of Fortive, succeeding James Lico, who will remain as a non-executive senior advisor until the end of the year. The company has announced that its second-quarter revenue is expected to be flat to slightly down, partly due to tariff-related pricing pressures and uncertainties in trade, healthcare, and government spending policies. Despite these challenges, Fortive anticipates its consolidated adjusted earnings per share to be near the mid-point of its previous guidance. Citi has raised its price target for Fortive to $59, maintaining a Neutral rating, while Raymond (NSE:RYMD) James lowered its target to $65 but kept an Outperform rating, citing trade concerns. Both firms have noted the potential for long-term growth and profitability following the restructuring. Fortive continues to trade under its existing symbol "FTV" on the NYSE.
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