We are maintaining our $87 fair value estimate after narrow-moat Fortive announced plans to spin off its precision technologies segment in the fourth quarter of 2025. We have seen the stock as persistently undervalued throughout the last three years, so the spinoff could be a positive catalyst by simplifying the portfolio and highlighting Fortive’s transformation into a more resilient business.
Management has an impressive record of capital allocation and improving operating margins of acquired companies.
Given its M&A-heavy strategy, Fortive faces acquisition risk, including the possibility of overpaying and challenges integrating acquired companies.
|
Metric
|
FTV
|
ITW
|
MMM
|
|---|---|---|---|
Price/Earnings (Normalized) | 21.63 | 26.32 | 14.38 |
Price/Book Value | 2.59 | 26.26 | 19.00 |
Price/Sales | 4.48 | 4.92 | 2.63 |
Price/Cash Flow | 18.86 | 23.30 | 14.19 |
|
Metric
|
FTV
|
ITW
|
MMM
|
|---|---|---|---|
Quick Ratio | 0.77 | 0.86 | 0.97 |
Current Ratio | 1.23 | 1.30 | 1.36 |
Interest Coverage | 8.07 | 15.01 | 1.05 |
|
Metric
|
FTV
|
ITW
|
MMM
|
|---|---|---|---|
Return on Assets (Normalized) | 7.67% | 20.07% | 9.79% |
Return on Equity (Normalized) | 12.41% | 103.48% | 93.10% |
Return on Invested Capital (Normalized) | 10.20% | 29.18% | 24.75% |
|
1-Day Chart
|
Name
|
Price
|
Morningstar Rating for Stocks
|
Capital Allocation
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Economic Moat
|
Market Cap
|
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United States