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  • Writer's pictureAbacus Research

Fortive: potential14% IRR

Fortive is a high quality business with an asset light model, high margins, high incremental margins and consistent FCF generation that is reinvested in M&A.

  • Recent guidance for slow organic growth for Q2 and CY2024 has impacted the stock, which we believe is an opportunity to accumulate.

  • Fortive’s key strength of integrating and improving acquisitions along with organic growth in instrumentation and testing should deliver close to (we cant quite get to it) management’s targeted earnings growth of 15% per year over the next 4 years.

Our opinion is that relative to other compounder business models, FTV looks to be relatively well positioned and offers compelling potential returns.

Potential Upside:     14% IRR over four years

Sensible Downside:  2% IRR

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