Fortive Corp (FTV): what the price requires

At today's price, Fortive Corp (FTV) is priced for +18.8% growth. boothcheck doesn't publish a fair value or a price target; it shows what the price assumes, so you can judge whether that bar is too high.

Generated: 2026-07-14 · Exported: 2026-07-16 · Source: https://boothcheck.com/report/FTV

Headline

FieldValue
TickerFTV
CompanyFortive Corp
Current price$62.07/sh
CompositionIntelligent Operating Solutions 69% / Advanced Healthcare Solutions 31%

What The Price Requires (Inversion)

The assumption today's price embeds, recovered by inverting the valuation.

FieldValue
Inversion basiswhole-company
Operating margin needed18.1%
Operating margin today17.6%
Margin expansion implied+0.5pp
Implied growth18.8%
Multiple paid30x operating income

The operating-margin requirement is derived from the framework's value band at year 12, a separately labeled basis from the headline growth/duration solve.

Solve inputs: computed at a 8% cost of capital with 4% terminal growth over a 5-year stage; each 1pp of cost of capital moves the implied operating-profit growth ~8.4pp.

Reconcile: at the x-ray's 9.3% required return this reads ~6 years; the models below use their own rates.

How unusual the bet is: within-range

ReferenceValue
vs own history+0.85σ
cohort percentile (of 177 peers)52
sustained it ~5 years at this level39%
implied end-window share0%

Valuation X-Ray

Every valuation family lands below the price. The price therefore requires assumptions beyond what those standard frames encode.

How the valuation models price the stock relative to the market price. Price/FV above 1.0 means the market pays more than that lens defends (expensive); at or below 1.0 the lens can defend the price.

FamilyMedian price/FVModelsReads
Asset3.36x5expensive
Earnings3.22x4expensive
Relative1.64x3expensive
Growth2.02x3expensive

Families that call it expensive: Asset, Earnings, Relative, Growth

The models below discount at their own flat-beta convention rates (cost of equity 9.3%, WACC 7.7%); the inversion above states its own rate.

Per-Model Detail (n=15)

ModelFamilyFVPrice/FVApplicableMethodology
DCF Perpetual GrowthGrowth$22.812.72xyesFCF base $1.0B, growth -10% (input: historical growth), terminal g 0.5%, WACC 7.7%, 5yr projection
DCF Exit MultipleGrowth$68.690.90xyesExit EV/EBITDA: 17.3x / 19.3x / 21.3x (bear / base = today's held flat / bull), 5yr
Relative ValuationRelative$40.591.53xyesP/E 23.31x (blended: static sector reference 18x + trailing (TTM) 36x), scenarios: 19.8x / 23.3x / 26.8x (bear / base = reference held flat / bull), EV/EBITDA 14.19x
Simple DDMGrowth——no—
Two-Stage DDMGrowth——no—
Simple Excess ReturnAsset$18.793.30xyesBV/sh $19.45, ROE (TTM) 8.9%, ke 9.3%
Two-Stage Excess ReturnAsset$18.473.36xyes5yr excess ROE then converge to ke=9.3%
Discounted Future Market CapGrowth$30.772.02xyesRev $4.7B, growth -15% (input: historical growth; tapered), Terminal P/S: 3.5x / 4.1x / 4.7x (bear / base = today's held flat / bull, cap 8x)
Growth-Adjusted P/ERelative——no—
Margin TrajectoryGrowth——no—
Earnings Power ValueEarnings$26.032.38xyesNormalized EBIT (5y avg op income, one-time charges added back) $0.98B × (1−17%) / WACC 7.7% → EPV (no growth)
Residual IncomeAsset$18.423.37xyesBV $19.45 + 5yr PV of (ROE (TTM) 8.9% − Kₑ 9.3%) × BV; BV grows 5.8%/yr
Graham NumberAsset$27.032.30xyes√(22.5 × EPS $1.67 × BVPS $19.45) — Graham's conservative floor
EV/EBITDA RelativeRelative$33.731.84xyesEBITDA $1.22B × sector EV/EBITDA 12.0x
FCF YieldEarnings$20.683.00xyesFCF $971.3M / Kₑ 9.3% — zero-growth perpetuity
SBC-Adj FCF YieldEarnings$16.853.68xyesSBC-adj FCF $0.86B (FCF $0.97B − SBC $0.11B) capitalized at Kₑ
Ben Graham FormulaEarnings$1.4044.34xyesEPS $1.67 × (8.5 + 2×-5.0%) × (4.4 / 5.3%) (excluded from median)
ROIC-Justified P/BAsset$4.0115.48xyesBV $19.45 × (ROIC 1.6% / WACC 7.7%)
P/Sales SectorRelative$37.871.64xyesRevenue $4.74B × sector P/S 2.5x
PEG Fair ValueRelative——no—
Earnings YieldEarnings$18.053.44xyesEPS $1.67 / required return 9.3% (Rf 4.3% + ERP 5.0%)
Funds From Operations MultipleRelative——no—
Clinical Phase NPVGrowth——no—
MertonAsset——no—
V5 Mechanical———no—

Solvency

FieldValue
Net debt$3.1b
Net debt / NOPAT (after-tax)5.03x
Net debt / operating income (pre-tax)4.20x
Share count CAGR (buyback)-10.5%
Burning cashno

Interest expense is not separately reported in the latest filings, so interest coverage cannot be computed.

Bullet Takeaways

Bull Case

The standard valuation toolkit struggles with Fortive, and the reason is instructive. Run the static frames over the company and they all land low. The earnings-power view, which capitalizes normalized operating profit and assumes no growth, lands near $13. The two excess-return models, which start from the $19.45 book value per share and add the present value of returns above the cost of equity, land in the high teens. Those models are not broken. They are measuring a business whose value does not sit on the balance sheet. Fortive's intelligent operating solutions and healthcare brands carry recurring software and service attachment that book value never captures, and the 10-K states the segment offerings directly: instrumentation, software and services that enable customers' mission-critical workflows (FY2025 10-K, accession 0001659166-26-000007).

What the asset frames miss, the operating results show. Q1 2026 revenue rose to $1.07 billion, up about 8% year over year, with core growth above 5% across both Intelligent Operating Solutions and Advanced Healthcare Solutions. Adjusted EPS of $0.70 was up roughly 25%. Free cash flow rose into the $190 million range and funded $500 million of buybacks. The share count has shrunk at roughly a 4% annual pace, which means every dollar of segment profit is spread over fewer shares each year. Interest coverage near 6x and a roughly $3.1 billion net-debt position against operating income above $740 million leave the balance sheet able to keep buying.

The portfolio that remains after the 2025 Ralliant separation is the higher-quality half. The healthcare segment runs sterilization, surgical-instrument tracking, and clinical-documentation franchises marketed under ASP, Censis, Fluke Biomedical, Landauer, and Provation (FY2025 10-K, accession 0001659166-26-000007), products that sit inside hospital workflows and renew. Trailing return on invested capital in the mid-20s, against a cost of capital near 8%, is the signature of a business compounding above its hurdle. That is the gap: the methods price what the company owns, and the price is paying for what the company keeps earning.

Bear Case

The bear case is most honest when it lets the valuation methods argue with each other. Of the applicable models, only the growth-DCF family reaches the $61 price. The DCF perpetual-growth model lands near $60 and the exit-multiple DCF near $57, so the cash-flow projections roughly clear the bar. Everything else falls short. Relative valuation, blending a sector multiple near 18x against a trailing multiple near 35x, lands around $41, leaving the price at about 1.5x that estimate. The earnings-power and excess-return models land far lower. When the only frames that justify the price are the ones that extrapolate growth, and every frame anchored to current earnings or to book value says richly valued, the conservative read is usually the more honest one.

The arithmetic behind the optimistic frames is demanding. At $61 the price is consistent with roughly 20% operating-income growth, well above the company's own guided core growth of 2% to 3% for 2026 and above the mid-single-digit core growth just delivered. That is a wide gap between what the price assumes and what management is guiding to. The DCF models that clear the price lean on terminal multiples held at or above today's levels, and a 19x to 21x exit EV/EBITDA is not a conservative assumption for an industrial compounder in a higher-rate world.

The balance sheet limits the cushion. Net debt sits near $3.1 billion, roughly 4x trailing operating income, and liquid assets are only about $356 million. That is serviceable while rates and end markets cooperate, but it leaves less room to absorb a cyclical air pocket in the instrumentation businesses or an integration misstep on the next bolt-on. A relative-valuation anchor near $41 and earnings-power anchors in the teens are not a forecast of where the stock goes, but they do frame how much of the current price is a bet on durability rather than a claim on present earnings.

Valuation

Start with what the $61 price implies and the picture is clear. Inverting the price puts the embedded bet at roughly 20% operating-income growth against a current operating margin near 17.6%, a pace well above the 2% to 3% core growth Fortive itself guides for 2026. The implied growth sits inside the company's own historical range rather than off the charts, but it asks the recent results to accelerate rather than fade.

The model X-ray shows why the price is a stretch for the static frames. Across the applicable methods the blended landing is near $41, with the relative-valuation method there as well on a blended P/E near 23x and EV/EBITDA near 14x. Asset-based methods land far lower: the simple and two-stage excess-return models near $18 to $19 off a $19.45 book value per share and a trailing ROE near 9%, and earnings-power value near $13 capitalizing normalized EBIT at a 7.6% WACC. Only the growth-DCF family reaches the price, with perpetual-growth near $60 and exit-multiple near $57.

The read is consistent across every frame: asset, earnings-power, and peer-multiple models all say richly valued, and only durable compounding the static models cannot price closes the gap. The peer set, RVTY, ROK, ST, VLTO, and VNT, places Fortive among quality industrial and instrumentation names where premium multiples are the norm. Net debt near 4x operating income and interest coverage near 6x mean the balance sheet can carry the bet, but it is a bet on durability, not a claim supported by current earnings.

Catalysts

Fortive reported Q1 2026 results on April 30, with revenue of $1.07 billion (up about 8% year over year) and adjusted EPS of $0.70 (up roughly 25%), both ahead of consensus. Management reaffirmed full-year 2026 adjusted EPS guidance of $2.90 to $3.00 and pointed to the upper half of the range, with core growth framed at 2% to 3%. The next quarterly print is the key near-term marker for whether core growth firms toward the high end.

The June 2025 separation of the Precision Technologies businesses into Ralliant is now in the rear-view, and the cleaner remaining portfolio is what the market is pricing. Watch the pace of capital return: free cash flow rose into the $190 million range in Q1 and funded $500 million of repurchases, so continued buybacks at this clip are the most visible lever on per-share results. Bolt-on M&A in the healthcare and software franchises is the other swing factor, since the implied growth in the price leans on the company sustaining above-guidance compounding rather than the low-single-digit core pace it has guided to.

Sources: Fortive Q1 2026 results (investors.fortive.com), Motley Fool transcript and StockTitan/Tickeron recaps (April 2026).

Peer Cohorts (Per Segment, With Filing Citations)

Intelligent Operating Solutions (reported)

Advanced Healthcare Solutions (reported)

Methodology Note

Fundamentals sourced from SEC EDGAR filings. Current price from Databento. The priced-in inversion and valuation x-ray are computed by the boothcheck engine; narrative composed by AI from the structured data.

View the full interactive FTV report on boothcheck