Yahoo Finance Earnings Update: Fortive Corporation (NYSE:FTV) Just Reported Its First-Quarter Results And Analysts Are Updating Their Forecasts
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.
The Bottom Line
The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Fortive. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.
Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple Fortive analysts - going out to 2024, and you can see them free on our platform here.
Even so, be aware that Fortive is showing 3 warning signs in our investment analysis , you should know about...
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
