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Last week saw the newest first-quarter earnings release from Fortive Corporation (NYSE:FTV), an important milestone in the company's journey to build a stronger business. It was a workmanlike result, with revenues of US$1.4b coming in 2.1% ahead of expectations, and statutory earnings per share of US$0.45, in line with analyst appraisals. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.
See our latest analysis for Fortive
After the latest results, the 18 analysts covering Fortive are now predicting revenues of US$5.83b in 2022. If met, this would reflect a decent 8.5% improvement in sales compared to the last 12 months. Statutory earnings per share are predicted to swell 18% to US$2.13. Before this earnings report, the analysts had been forecasting revenues of US$5.80b and earnings per share (EPS) of US$2.19 in 2022. So it looks like there's been a small decline in overall sentiment after the recent results - there's been no major change to revenue estimates, but the analysts did make a small dip in their earnings per share forecasts.
It might be a surprise to learn that the consensus price target was broadly unchanged at US$80.39, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. Currently, the most bullish analyst values Fortive at US$98.00 per share, while the most bearish prices it at US$65.00. This shows there is still a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.
Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. For example, we noticed that Fortive's rate of growth is expected to accelerate meaningfully, with revenues forecast to exhibit 11% growth to the end of 2022 on an annualised basis. That is well above its historical decline of 6.5% a year over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in the industry are forecast to see their revenue grow 6.3% per year. So it looks like Fortive is expected to grow faster than its competitors, at least for a while.