Veralto Corp (VLTO) Stock Forecast & Price Target

Veralto's strong financial performance is evidenced by its approximately $5.2 billion in revenue for 2024 and a notable organic sales growth of 5.1% year-over-year. The company achieved impressive core sales growth of 6.9% in North America, fueled by a high-single-digit increase in its Product Quality and Innovation segment, alongside a mid-single-digit growth in its Water Quality segment. Furthermore, management anticipates a contraction in operating margins by approximately 30 basis points year-over-year for the fourth quarter, positively influenced by contributions from both segments and a robust increase in recurring revenue driven by consumables and services.

Veralto's adjusted operating margins declined by 10 basis points year-over-year, landing at 23.9%, which indicates potential concerns for profitability amidst a challenging economic landscape. The firm's anticipated cash EPS for 2026 is projected at $3.95, with a possible downside scenario reflecting a significant valuation contraction to $83 per share, underscoring uncertainties surrounding customer demand and economic conditions. Additionally, ongoing inflationary pressures, competition, and regulatory challenges are expected to disrupt Veralto's supply chain and operational performance, potentially undermining its ability to retain market share and achieve growth.