Fortive Expands Buybacks, Announces Pro Rata Ralliant Stock Dividend

Fortive Corporation FTV has announced a significant expansion of its share repurchase efforts, reflecting strong confidence in its long-term growth prospects and disciplined capital allocation strategy.

The company’s board of directors has authorized an increase of approximately 15.63 million shares under its general share repurchase program. This brings the total number of shares available for buyback to 20 million, including the 4.37 million shares remaining from prior authorizations. The general repurchase program remains open-ended with no expiration date, allowing Fortive to repurchase shares at its discretion over time.

Aligned with this, Fortive has also introduced a Special Purpose Share Repurchase Program. This program permits the company to repurchase up to $550 million of its common stock using proceeds from the anticipated $1.15 billion pre-separation dividend to be received from Ralliant Corporation, Fortive’s Precision Technologies segment, which is set to spin off on June 28, 2025. The company may also use any additional cash received from Ralliant in connection with the separation.

Fortive Corporation Price and Consensus

Fortive Corporation price-consensus-chart | Fortive Corporation Quote

Along with this, the company announced that its board has approved the distribution of 100% of the outstanding shares of Ralliant Corporation to Fortive shareholders through a pro rata dividend. Shareholders of record, as of the close of business on June 16, 2025, will receive one share of Ralliant common stock for every three shares of Fortive common stock they own. The distribution is scheduled to occur on June 28, 2025. Shareholders entitled to fractional shares will instead receive a cash payment in lieu of those fractions.

Management highlighted that Fortive has already allocated about 75% of its free cash flow toward share repurchases since first announcing the spin-off last year, and the renewed authorization underscores the company’s focus on a balanced, value-driven capital deployment strategy post-separation.
Fortive’s continued focus on share buybacks is a strategic move aimed at enhancing bottom-line performance and delivering value to shareholders. In the first quarter, the company repurchased 2.5 million shares as planned, maintaining its consistent pace of buybacks.

Fortive remains committed to using free cash flow for additional share repurchases as it progresses with the anticipated spin-off. Continued focus on returning cash to the company’s shareholders is a positive signal, as it boosts the bottom line and supports stock price appreciation in the near term.

Together, these initiatives underscore Fortive’s confidence in its financial health and growth trajectory as it moves forward with transforming Ralliant into a fully independent public company.

However, uncertain macro environment and tariff impacts, along with high debt and stiff competition, may hurt the company’s performance. Fortive revised its 2025 guidance due to a delayed recovery in Precision Technologies and global tariff impacts. Before mitigation efforts, it estimates gross tariff costs of $190–$220 million, mainly from China, with a 60-40 split between New Fortive and Ralliant. For the second quarter, adjusted EPS is estimated to be 85-90 cents, including tariff headwinds. Tariffs are expected to weigh on second-quarter adjusted operating margins.

Zacks Rank and Share Price Performance

Currently, Fortive has a Zacks Rank #4 (Sell). Shares of the company have lost 2.8% in the past year against no change for the Zacks Electronics - Testing Equipment industry.

Stocks to Consider

Some better-ranked stocks from the broader technology space are Juniper Networks, Inc. JNPR, Ubiquiti Inc. UI and InterDigital, Inc. IDCC. JNPR presently sports a Zacks Rank #1 (Strong Buy), whereas UI and IDCC carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

In the last reported quarter, JNPR delivered an earnings surprise of 4.88%. Juniper Networks’ long-term earnings growth rate is 12.4%. Its shares have inched up 2.3% in the past year.

UI’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, with the average surprise being 29.93%. In the last reported quarter, Ubiquiti delivered an earnings surprise of 61.29%. Its shares have surged 184.7% in the past year.

IDCC earnings beat the Zacks Consensus Estimate in three of the trailing four quarters while missing in one, with the average surprise being 160.15%. InterDigital’s long-term earnings growth rate is 15%. Its shares have jumped 87.8% in the past year.

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This article originally published on Zacks Investment Research (zacks.com).

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