Stock Analysis | Fortive Outlook - A Bearish Technical Signal Amid Mixed Analyst Expectations

Market Snapshot

Fortive (FTV) is showing a weak technical outlook, with bearish indicators dominating and an internal diagnostic score of 1.88. This suggests caution for investors who may want to avoid exposure until the trend improves.

News Highlights

Recent global headlines highlight key developments outside of Fortive's immediate sector. Here are the most relevant ones:

• Farm machinery industry eyes modest recovery (May 29): Sales of farm equipment in Brazil are showing signs of stabilization, with a 12% revenue rise since November 2024. While not directly relevant to Fortive, this hints at a potential sectoral rebound in industrial and manufacturing equipment over time.
• ETFGI reports record $1.25 trillion in Asia-Pacific ETF assets (May 31): The ETF industry in Asia (excluding Japan) is surging, which could indirectly boost demand for Fortive's diversified industrial products as markets continue to grow in the region.
• Genentech’s new drug shows 30% improved survival in breast cancer treatment (May 31): A major breakthrough in medical technology could indicate stronger innovation spending globally, which may eventually support Fortive's business in the long term, given its focus on diversified industrial solutions.

Analyst Views & Fundamentals

Analysts remain cautiously neutral on Fortive, with a simple average rating of 3.00 and a performance-weighted rating of 4.12. While the ratings are not overwhelmingly negative, they are not bullish either, indicating a mix of expectations.

Notably, the price of Fortive rose by 5.54% in the last week, but this outperformance does not align with the neutral to bearish analyst outlooks, which are split in their assessments. For example:

• Truist Securities (Jamie Cook): Maintains a neutral stance, with a historical win rate of 80.0% and average return of 3.99%.
• RBC Capital (Deane Dray): Also neutral, with a 71.4% win rate and 2.41% average return.
• Barclays (Julian Mitchell): Gives a neutral rating, with a 50.0% win rate and a 0.58% average return.

Fundamental Factors

Fortive's fundamentals are mixed, with a total internal diagnostic score of 4.62. Here's a breakdown of key metrics:

• ROE (Return on Equity): 1.60% → internal score of 3.00
• ROA (Return on Assets): 0.91% → internal score of 3.00
• CFOA (Cash Flow from Operations): 1.71% → internal score of 2.00
• EV/EBIT: 84.33 → internal score of 4.00
• Asset-MV (Asset Market Value): 28.79% → internal score of 2.00
• Net profit attributable to parent company shareholders (YoY growth rate %): -15.90% → internal score of 3.00

While some fundamentals like EV/EBIT and ROA are decent, the net profit and EPS growth are weak, which may explain the mixed analyst outlooks.

Money-Flow Trends

Fortive has attracted strong inflows from large institutional investors recently, although the overall trend remains negative. The inflow ratio for large and extra-large funds stands at 44.30%, slightly higher than the average inflow of 43.81%. This indicates that big players are showing some interest, but it's not enough to offset the bearish momentum.

Key Technical Signals

Technically, Fortive is in a weak state with an internal diagnostic score of 1.88 and bearish signals dominating the chart. The bearish indicators include:

• WR Overbought: Score of 1.09 → a strong bearish signal suggesting oversold conditions may reverse soon.
• MACD Golden Cross: Score of 1.29 → historically a neutral bias, but recent performance has been weak (avg. return -1.75%).
• WR Oversold: Score of 3.26 → a weaker bearish signal, with a 50.94% win rate when activated.

In the past five days, the stock triggered signals on the following dates:

• August 11: WR Oversold
• August 13: WR Overbought
• August 14: MACD Golden Cross

These mixed signals indicate a market in flux, with limited momentum and a tendency to correct downward.

Conclusion

Fortive appears to be in a technical bear market with weak indicators, low inflows, and mixed analyst opinions. While some fundamental factors like EV/EBIT are positive, earnings and profit growth are dragging the stock down. Investors should consider avoiding Fortive for now and wait for a clearer upward trend or a strong positive earnings report before re-entering the stock.