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EVERETT, Wash. - Fortive Corporation (NYSE:FTV), a $24.34 billion industrial technology company with impressive gross profit margins of nearly 60%, has completed the separation of its Precision Technologies segment through a 100% spin-off of Ralliant Corporation to shareholders, the company announced Monday. According to InvestingPro analysis, Fortive maintains a "GOOD" overall financial health score, suggesting strong operational fundamentals.
Fortive shareholders received one share of Ralliant common stock for every three Fortive shares held as of June 16, with approximately 113 million Ralliant shares distributed. Ralliant began trading on the New York Stock Exchange under the symbol "RAL" on Monday. The separation comes as Fortive’s stock trades near $71.60, showing resilience with a beta of 1.16 against market volatility.
Concurrent with the separation, Olumide Soroye has assumed the role of President and Chief Executive Officer of Fortive, replacing James Lico who retired as President, CEO and Director. Lico will continue as a non-executive senior advisor until year-end.
Soroye indicated that Fortive has experienced increased pressure on tariff-related pricing and customer demand late in the second quarter, driven by uncertainty in trade, healthcare and government spending policy. The company now estimates second quarter revenue and core revenue as flat to slightly down, while Ralliant is expected to decline mid-single digits. Despite these challenges, Fortive estimates second quarter consolidated adjusted earnings per share near the mid-point of its previous guidance range.
"New Fortive emerges with a strong financial track record with robust free cash flow generation, approximately 50% recurring revenue, significant competitive advantages, and a strategic orientation toward attractive markets with strong secular tailwinds," Soroye said in the press release statement. InvestingPro data confirms this strength, revealing annual free cash flow of $1.39 billion and a moderate debt-to-capital ratio of 0.14. Discover more insights about Fortive’s financial health and growth potential with InvestingPro’s comprehensive research report, part of its coverage of over 1,400 US stocks.
Following the separation, Fortive will focus on its Intelligent Operating Solutions and Advanced Healthcare Solutions segments, with operations in approximately 50 countries and a workforce of more than 10,000 employees.
Fortive will continue trading on the New York Stock Exchange under the symbol "FTV."
In other recent news, Fortive Corporation has been the focus of several analyst updates and strategic announcements. The company reiterated its guidance for the second quarter, 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. Fortive plans to provide an updated full-year outlook during its Q2 earnings call. The upcoming separation from Ralliant Corporation is scheduled for June 28, and both entities are expected to prioritize organic growth while maintaining disciplined capital allocation strategies.
Analysts have varied in their assessments of Fortive, with BNP Paribas Exane raising its price target to $75.00 while maintaining a Neutral rating, and RBC Capital lowering its target to the same amount with a Sector Perform rating. In contrast, JPMorgan reiterated its Overweight rating with a higher price target of $87.00, citing Fortive’s strong portfolio of niche industrial businesses. The strategic spin-off of Ralliant, a test and measurement/sensors business, is anticipated to enhance Fortive’s focus on its core operations.
Fortive’s leadership has emphasized its commitment to sustainable growth and shareholder value, leveraging its Fortive Business System and integrating new technologies. The company aims to simplify its portfolio around ten market-leading brands and align with favorable secular trends for enhanced growth and profitability. Investors and analysts alike are closely monitoring these developments as Fortive and Ralliant prepare to operate as independent entities.
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