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Spotting Winners: Fortive (NYSE:FTV) And Professional Tools and Equipment Stocks In Q1


Kayode Omotosho /
2024/07/01 5:18 am EDT

Wrapping up Q1 earnings, we look at the numbers and key takeaways for the professional tools and equipment stocks, including Fortive (NYSE:FTV) and its peers.

Automation that increases efficiency and connected equipment that collects analyzable data have been trending, creating new demand. Some professional tools and equipment companies also provide software to accompany measurement or automated machinery, adding a stream of recurring revenues to their businesses. On the other hand, professional tools and equipment companies are at the whim of economic cycles. Consumer spending and interest rates, for example, can greatly impact the industrial production that drives demand for these companies’ offerings.

The 9 professional tools and equipment stocks we track reported a mixed Q1; on average, revenues missed analyst consensus estimates by 0.7%. Stocks, especially growth stocks where cash flows further in the future are more important to the story, had a good end of 2023. But the beginning of 2024 has seen more volatile stock performance due to mixed inflation data, and professional tools and equipment stocks have had a rough stretch, with share prices down 8.9% on average since the previous earnings results.

Fortive (NYSE:FTV)

Taking its name from the Latin root 'fort' meaning strong, Fortive (NYSE:FTV) manufactures products and develops software for numerous industries.

Fortive reported revenues of $1.52 billion, up 4.4% year on year, falling short of analysts' expectations by 0.2%. It was a mixed quarter for the company, with an impressive beat of analysts' operating margin estimates but full-year revenue guidance missing analysts' expectations.

James A. Lico, President and Chief Executive Officer, stated, “Our results in the first quarter once again reflect the resiliency and strength of our differentiated portfolio of businesses. All three segments performed ahead of expectations on core growth, margins, earnings growth, and free cash flow, all enabled by the strength and rigorous application of the Fortive Business System (FBS). We are confident in our raised outlook for the year, continuing our track record of compounding earnings and free cash flow growth by double-digits in 2024.”

Fortive Total Revenue

The stock is down 8.1% since the results and currently trades at $74.1.

Is now the time to buy Fortive? Access our full analysis of the earnings results here, it's free.

Best Q1: Hyster-Yale Materials Handling (NYSE:HY)

Playing a significant role in the development of the hydraulic lift truck, Hyster-Yale (NYSE:HY) designs, manufactures, and sells materials handling equipment to various sectors.

Hyster-Yale Materials Handling reported revenues of $1.06 billion, up 5.7% year on year, outperforming analysts' expectations by 2.4%. It was a stunning quarter for the company, with an impressive beat of analysts' revenue, earnings and operating margin estimates.

Hyster-Yale Materials Handling Total Revenue

Hyster-Yale Materials Handling pulled off the fastest revenue growth among its peers. The stock is up 17.9% since the results and currently trades at $69.73.

Is now the time to buy Hyster-Yale Materials Handling? Access our full analysis of the earnings results here, it's free.

Weakest Q1: Middleby (NASDAQ:MIDD)

Holding a Guinness World Record for creating the world’s fastest conveyor pizza oven, Middleby (NYSE:MIDD) is a food service and equipment manufacturer.

Middleby reported revenues of $926.9 million, down 8% year on year, falling short of analysts' expectations by 5.5%. It was a weak quarter for the company, with a miss of analysts' operating margin and earnings estimates.

Middleby had the slowest revenue growth in the group. The stock is down 13.7% since the results and currently trades at $122.61.

Read our full analysis of Middleby's results here.

Stanley Black & Decker (NYSE:SWK)

With an iconic “STANLEY” logo which has remained virtually unchanged for over a century, Stanley Black & Decker (NYSE:SWK) is a manufacturer primarily catering to the tool and outdoor equipment industry.

Stanley Black & Decker reported revenues of $3.87 billion, down 1.6% year on year, in line with analysts' expectations. It was an ok quarter for the company, with a solid beat of analysts' organic revenue estimates but a miss of analysts' operating margin estimates.

The stock is down 12.9% since the results and currently trades at $80.03.

Read our full, actionable report on Stanley Black & Decker here, it's free.

Kennametal (NYSE:KMT)

Involved in manufacturing hard tips of anti-tank projectiles in World War II, Kennametal (NYSE:KMT) is a provider of industrial materials and tools for various sectors.

Kennametal reported revenues of $515.8 million, down 3.8% year on year, falling short of analysts' expectations by 0.5%. It was a slower quarter for the company, with a miss of analysts' operating margin estimates.

The stock is down 4.1% since the results and currently trades at $23.54.

Read our full, actionable report on Kennametal here, it's free.

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