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Investing.com - Morgan Stanley downgraded Fortive (NYSE:FTV) from Overweight to Equalweight on Tuesday, while significantly reducing its price target to $50.00 from $90.00 following the company’s RAL separation. The industrial technology company, currently valued at $16.2 billion, is trading near its 52-week low of $46.34.
The downgrade comes as Fortive’s organic growth has slowed to approximately flat compared to its previous mid-single-digit growth rate. According to InvestingPro data, 13 analysts have recently revised their earnings expectations downward, though the company maintains impressive gross profit margins of nearly 60%. Morgan Stanley simultaneously launched coverage of the spun-off RAL entity with an Overweight rating.
The investment bank cited concerns about Fortive’s recovery pathway, noting it remains unclear and is further complicated by U.S. policy uncertainty. Approximately 40% of the company’s revenue is tied to government and healthcare spending. Get deeper insights into Fortive’s financial health and growth prospects with InvestingPro, which offers exclusive analysis and 8 additional key insights for this stock.
Morgan Stanley indicated that while Fortive’s sharply reduced valuation provides some downside protection, consensus forecasts still model a return to normalized 4% organic growth in 2026-27, which may lead to negative earnings revisions.
The firm expects this potential for downward revisions will keep Fortive’s valuation depressed over the coming quarters, supporting the Equalweight rating following the separation.
In other recent news, Fortive Corporation reported its earnings for the second quarter of 2025, revealing an adjusted earnings per share (EPS) of $0.58, which was slightly below the forecast of $0.59. The company’s revenue for the quarter was $1.02 billion, aligning with expectations. Barclays downgraded Fortive from Overweight to Equalweight, citing concerns about the company’s second-half performance outlook and reducing the price target to $54.00 from $58.00. This downgrade followed Fortive’s second-quarter guidance update, which Barclays believes indicates a challenging ramp-up required to achieve the midpoint of the company’s projected range. Truist Securities also downgraded Fortive, moving it from Buy to Hold, and adjusted the price target to $55.00 from $60.00. The downgrade from Truist came after Fortive completed its spin-off of PT and installed new management with a more streamlined portfolio of businesses. These developments reflect ongoing investor and analyst concerns regarding Fortive’s growth prospects and financial performance.
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