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Fortive (FTV) shares soared 8.3% in the last trading session to close at $67.76. The move was backed by solid volume with far more shares changing hands than in a normal session. This compares to the stock's 15.7% loss over the past four weeks.
The increase in share price can be linked to President Trump’s announcement of a 90-day suspension on reciprocal tariffs, excluding China. This news caused stock market indices to surge, which in turn boosted the value of many stocks, including Fortive.
In addition to that, company-specific factors are also playing a key role in driving the stock’s performance. Fortive is seeing strength across its Intelligent Operating Solutions (IOS) and Advanced Healthcare Solutions (AHS) segments. Strong performance in software and recurring revenue streams is expected to support continued core growth.
For 2025, the company projects core revenue growth in the range of 1.5% to 3.5%. Additionally, Fortive is progressing toward completing the tax-free spin-off of its Precision Technologies (PT) segment, aiming to establish two separate, publicly traded companies by the third quarter of 2025.
Fortive is using its free cash flow to buy back shares, aiming to boost profits and support its stock price. In the second half of 2024, it repurchased about 10 million shares, using 80% of its free cash flow. The company plans to use around 75% of its free cash flow for buybacks until the Precision Technologies spin-off is complete. This focus on returning cash to shareholders is a positive sign for near-term stock performance.
This industrial conglomerate is expected to post quarterly earnings of $0.85 per share in its upcoming report, which represents a year-over-year change of +2.4%. Revenues are expected to be $1.5 billion, down 1.9% from the year-ago quarter.
Earnings and revenue growth expectations certainly give a good sense of the potential strength in a stock, but empirical research shows that trends in earnings estimate revisions are strongly correlated with near-term stock price movements.
For Fortive, the consensus EPS estimate for the quarter has been revised 1% lower over the last 30 days to the current level. And a negative trend in earnings estimate revisions doesn't usually translate into price appreciation. So, make sure to keep an eye on FTV going forward to see if this recent jump can turn into more strength down the road.
The stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>