Danaher's Spun-Off Company Veralto Is "Next High-Quality Serial Compounder" - Analyst
Portfolio Pulse from Lekha Gupta
BMO Capital Markets analyst John P. McNulty initiated coverage on Veralto Corporation (VLTO) with an Outperform rating and a price target of $97, citing strong EPS growth potential in the next 2-3 years. Veralto, which spun off from Danaher Corp (DHR) and began NYSE trading in October 2023, is expected to leverage its high-margin businesses and significant free cash flow for M&A to support double-digit EPS growth. The company recently reported Q4 earnings that beat consensus estimates and anticipates flat Y/Y non-GAAP core sales for Q1 FY24 with adjusted EPS of $0.73-$0.78.
February 27, 2024 | 7:15 pm
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NEUTRAL IMPACT
Danaher Corp, the former parent of Veralto, may see indirect effects from Veralto's positive analyst coverage and strong performance post-spinoff.
While the direct impact on Danaher's stock is less clear, the successful spinoff and positive performance of Veralto could reflect favorably on Danaher's strategic decisions and potentially its stock price in the short term.
CONFIDENCE 70
IMPORTANCE 60
RELEVANCE 50
POSITIVE IMPACT
Veralto Corporation received an Outperform rating from BMO Capital Markets with a price target of $97, indicating strong future EPS growth and potential for M&A-driven expansion.
The Outperform rating and optimistic EPS growth projections by a reputable analyst, along with recent earnings that exceeded expectations, suggest a positive short-term outlook for VLTO's stock price.
CONFIDENCE 85
IMPORTANCE 90
RELEVANCE 100