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Investing.com - Seaport Global Securities initiated coverage of Ralliant Corp. (NYSE:RAL), a $5.36 billion market cap company, with a Neutral rating on Monday. The stock currently trades at $47.40, near its 52-week high of $55.08.
The research firm cited mixed prospects for the company, which was recently spun off from parent company Fortive (NYSE:FTV).
Seaport Global expressed optimism about the long-term benefits of the spin-off, suggesting that Ralliant’s narrowed focus would likely improve sales and margin consistency while creating value over time.
Near-term challenges remain significant, however, with the firm expecting sales declines and continued weak margins, particularly due to pressures at Tek, Ralliant’s largest division.
Seaport Global believes upside to their estimates is limited and considers Ralliant shares to be fairly valued at current levels.
In other recent news, Ralliant Corporation has begun trading as an independent entity on the New York Stock Exchange following its complete spin-off from Fortive Corporation. The separation resulted in the distribution of approximately 113 million shares of Ralliant common stock, with Fortive shareholders receiving one share of Ralliant for every three shares of Fortive held. Alongside this transition, Ralliant’s Board of Directors has approved a share repurchase program of up to $200 million, reflecting a commitment to returning value to shareholders. Meanwhile, Fortive has issued a warning regarding potential second-quarter revenue challenges, citing pressures from tariff-related pricing and customer demand uncertainties. These factors have led Fortive to project its revenue and core revenue as "flat to slightly down" for the quarter. BofA Securities has initiated coverage on Ralliant with an Underperform rating, citing valuation concerns. However, the firm also notes positive trends in Ralliant’s Test & Measurement and aerospace components businesses, which are benefiting from global defense spending and infrastructure investments. Olumide Soroye has assumed the role of President and CEO of Fortive, succeeding James Lico, who will remain as a non-executive senior advisor until the end of the year.
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