Analyst Note| Krzysztof Smalec, CFA |
We are increasing our fair value estimate for narrow-moat-rated Fortive to $84 from $82 after the firm reported strong second-quarter results and raised its guidance for full-year 2021. Fortive’s second-quarter adjusted EPS of $0.66 came in $0.06 above the FactSet consensus estimate. Our fair value increase reflects an improved near-term outlook and time value of money. We see shares of the cash compounder as undervalued, with the stock trading in 4-star territory, roughly 18% below our updated fair value estimate.