Last Update 19 Feb 26

Fair value Increased 6.99%

FTV: Recent Rating Shift And Buybacks Will Shape Future Return Profile

Our updated Fortive narrative reflects a higher implied price target of about $62, as analysts factor in steadier revenue growth assumptions, slightly stronger profit margins, a modestly lower discount rate, and a similar forward P/E, consistent with a series of recent price target increases across the Street.

Analyst Commentary

Recent Street research shows a cluster of higher Fortive price targets, alongside at least one downgrade. Together, these provide a mixed but useful read on how expectations around execution and valuation are evolving.

Bullish Takeaways

Bullish analysts lifting price targets by between US$4 and US$9 point to a view that current valuation leaves room for upside if Fortive delivers on its revenue and margin assumptions that are now baked into models.
The series of upward target revisions suggests increased confidence in the company’s ability to execute on its plan consistently enough for earnings to support a higher implied value.
Several of the higher targets are framed around a similar forward P/E. This implies these analysts see earnings power, rather than multiple expansion, as the key driver of their updated fair value estimates.
The clustering of positive target changes within a short time window signals that, for these bullish analysts, recent company updates were sufficient to refine and raise their scenarios around growth and profitability.

Bearish Takeaways

The recent downgrade from JPMorgan is a reminder that not all analysts see the risk and reward balance the same way, with some placing more weight on execution risks or macro sensitivity when thinking about future cash flows.
Bearish analysts may view the series of higher price targets as leaving less margin of safety at current prices, especially if revenue or margin outcomes land closer to the low end of Street expectations.
The mix of higher targets alongside a downgrade suggests concern that even with improved modeling assumptions, Fortive still needs to prove that its performance can consistently support the valuation implied by the new targets.
For more cautious readers, the downgrade flags the possibility that expectations have become tighter. This means any shortfall against consensus revenue or earnings could have a sharper impact on how the stock is priced.

What's in the News

From September 27, 2025 to December 31, 2025, Fortive repurchased 5,113,383 shares, or 1.61% of its shares, for US$265 million under the buyback announced on February 17, 2022. This completed a total of 43,483,303 shares repurchased, or 12.68%, for US$2,734.24 million (Key Developments).
Over the same period, Fortive reported no share repurchases under the separate buyback announced on May 27, 2025, with 0 shares and US$0 million executed so far under that authorization (Key Developments).

Valuation Changes

Fair Value: the updated implied fair value has risen slightly from $58.13 to $62.19.
Discount Rate: the discount rate assumption has fallen slightly from 8.83% to 8.77%.
Revenue Growth: the revenue growth assumption has shifted from a 9.76% decline to 4.04% growth.
Net Profit Margin: the profit margin assumption has edged higher from 15.66% to 16.20%.
Future P/E: the forward P/E assumption is essentially unchanged, moving slightly from 26.83x to 26.57x.

Expansion of recurring revenues, digital innovation, and smart industry trends are set to drive sustained growth, increased margins, and market expansion.
Operational discipline, strategic acquisitions, and backlog conversion are expected to boost cost efficiency and support near-term earnings recovery.
Greater segment concentration, fiscal tightening, trade volatility, M&A execution risk, and healthcare headwinds heighten uncertainty for revenue growth, margin stability, and future earnings quality.

Catalysts

About Fortive

Designs, develops, manufactures, and markets products, software, and services in the United States, China, and internationally.What are the underlying business or industry changes driving this perspective?

Fortive's increasing mix of recurring revenues-now at 50%-through expansion of software, services, and subscription models, including double-digit ARR growth at key brands like Fluke and SaaS momentum at AHS, is expected to drive improved revenue visibility and margin expansion in future periods, supporting both top-line growth and higher net margins.
The company is positioned to benefit from long-term infrastructure investment, smart city, and industrial automation trends, as evidenced by robust demand for building automation, reliability solutions, and advanced measurement tools, which are anticipated to expand Fortive's addressable markets and accelerate revenue growth over the medium to long term.
Successful execution of the Fortive Accelerated strategy, with an explicit focus on innovation (e.g., AI-enabled customer experience upgrades, launch of award-winning instrumentation, strong new product funnels), is aimed at leveraging digital transformation and increasing IoT adoption across end markets, supporting sustained future revenue growth and margin improvement.
Ongoing operational excellence via the Amplified Fortive Business System and disciplined capital allocation-including targeted bolt-on acquisitions in niche software and analytics-are expected to deliver further cost productivity, improved net margins, and robust free cash flow conversion.
Tariff-related cost pressures and temporary customer demand deferrals in Q2 have caused near-term revenue volatility and may be weighing on valuation, but management expects deferred orders (building backlog) to convert in subsequent quarters and for full implementation of pricing and supply chain countermeasures to restore or improve gross margins and earnings, providing a near-term catalyst for earnings normalization and potential upside.

Fortive Future Earnings and Revenue Growth

Assumptions

How have these above catalysts been quantified?

Analysts are assuming Fortive's revenue will decrease by 9.8% annually over the next 3 years.
Analysts assume that profit margins will increase from 12.5% today to 16.5% in 3 years time.
Analysts expect earnings to reach $741.9 million (and earnings per share of $2.05) by about September 2028, down from $768.9 million today.
In order for the above numbers to justify the analysts price target, the company would need to trade at a PE ratio of 32.8x on those 2028 earnings, up from 21.0x today. This future PE is greater than the current PE for the US Machinery industry at 24.7x.
Analysts expect the number of shares outstanding to decline by 2.48% per year for the next 3 years.
To value all of this in today's terms, we will use a discount rate of 8.69%, as per the Simply Wall St company report.

Fortive Future Earnings Per Share Growth

Risks

What could happen that would invalidate this narrative?

The spin-off of the Precision Technologies segment (now Ralliant) leaves Fortive more focused but also exposes it to higher concentration risk in its remaining segments, potentially reducing diversification and increasing earnings volatility in the face of segment-specific headwinds (impacts revenue and earnings stability).
Prolonged government fiscal tightening and constrained state/local spending, as highlighted by Gordian's weak year-end results, could lead to slower recovery and unpredictability in recurring public sector end-markets, affecting core revenue growth and organic acceleration objectives (impacts revenue and recurring growth).
Persistent U.S.-China tariff uncertainty and broader volatility in global trade policy remain acute headwinds, with the company citing significant quarterly revenue and gross margin drag from both direct tariff expenses and deferred customer demand; ongoing or escalated trade frictions could continue to pressure margins and limit revenue visibility (impacts gross margins and near-term/long-term revenue).
Ongoing reliance on bolt-on M&A, even with stricter financial scrutiny, introduces integration and execution risk, particularly after a period of management transition and organizational re-focus post-spin, which could dampen net margin improvement and jeopardize anticipated synergy realization (impacts net margins and future earnings quality).
The Advanced Healthcare Solutions (AHS) segment faces structural pressure from U.S. health care reimbursement policy changes and delayed hospital capital spending, with management indicating no near-term improvement expected; extended softness here risks eroding overall growth, especially as comps toughen and organic innovation may lag digital-first competitors (impacts segment revenue and operating margin trajectory).

Valuation

How have all the factors above been brought together to estimate a fair value?

The analysts have a consensus price target of $60.5 for Fortive based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $116.0, and the most bearish reporting a price target of just $50.0.
In order for you to agree with the analyst's consensus, you'd need to believe that by 2028, revenues will be $4.5 billion, earnings will come to $741.9 million, and it would be trading on a PE ratio of 32.8x, assuming you use a discount rate of 8.7%.
Given the current share price of $47.71, the analyst price target of $60.5 is 21.1% higher. Despite analysts expecting the underlying buisness to decline, they seem to believe it's more valuable than what the market thinks.
We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.

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Disclaimer

AnalystConsensusTarget is a tool utilizing a Large Language Model (LLM) that ingests data on consensus price targets, forecasted revenue and earnings figures, as well as the transcripts of earnings calls to produce qualitative analysis. The narratives produced by AnalystConsensusTarget are general in nature and are based solely on analyst data and publicly-available material published by the respective companies. These scenarios are not indicative of the company's future performance and are exploratory in nature. Simply Wall St has no position in the company(s) mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The price targets and estimates used are consensus data, and do not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that AnalystConsensusTarget's analysis may not factor in the latest price-sensitive company announcements or qualitative material.

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