Zacks Industry Outlook Highlights Fortive, AMETEK and Itron

For Immediate ReleaseChicago, IL – December 10, 2024 – Today, Zacks Equity Research discusses Fortive FTV, AMETEK AME and Itron ITRI.Industry: Electronics TestingLink: https://www.zacks.com/commentary/2381008/3-electronics-testing-stocks-to-watch-from-a-prospering-industryThe Zacks Electronics – Testing Equipment industry has been benefiting from 5G-related growth opportunities, strengthening automation drive and the Industry 4.0 momentum for a while. A strong recovery in the automotive sector, along with the growing proliferation of self-driving vehicles and solid prospects of the Advanced Driver Assistance System, is a tailwind for the industry players.The increasing adoption of software-enabled testing instruments and devices is another positive. Industry participants like Fortive, AMETEK and Itron are well-poised to benefit from the aforementioned factors. However, a challenging global macroeconomic environment, end-market volatility, recessionary fears, unfavorable forex and growing geo-political tensions are persistent concerns for the underlined industry.Industry DescriptionThe Zacks Electronics – Testing Equipment industry comprises companies offering advanced instruments, electronic testing equipment solutions, thermal management systems, electrical connectors, motors and various test solutions. The major end markets served by this industry are consumer, automobile, industrial, aerospace and defense, healthcare, semiconductors and communications, to name a few. Industry participants have been making technological advancements to gain traction among semiconductors, vehicles, machinery, smartphones and medical device manufacturers, who are constantly increasing their spending on electronic components.3 Trends Shaping the Future of Electronics - Testing Equipment IndustrySolid Adoption of Motion Control & Test Systems is Positive: The rising utilization of precision motion-control solutions and automatic test systems in motion-control devices and testing products, particularly in the aerospace, automation, medical and military markets, is an upside. Commercial motor and autonomous vehicles will likely continue to hike the demand for vehicle-tracking systems, fleet-management solutions and other private fleet applications, which are part of the industry’s key offerings.Synergies in the Pharmaceutical Market are Tailwinds: The industry has been steadily gaining from the increasing use of electrical instruments and software to interrogate the biological properties of molecules and cells in clinical and medical science research. The rapid adoption of the solutions is anticipated to drive growth for participants in the pharmaceutical end market. Agilent is capitalizing on the trend and gaining traction in the life science research space. The pharmaceutical market holds immense prospects, courtesy of the growing utilization of electronic testing equipment. Rising demand for RF test equipment by medical device manufacturers is another uptrend.5G Prospects Act as Boons: The growing deployment of 5G holds near-term promises for the industry players. Another major positive is an uptick in demand for 5G test solutions required for 5G deployment. In addition, the ongoing trend of migrating infrastructure workloads to cloud, which continues to bolster the demand for high-speed Internet services, bodes well for electronic companies associated with 5G. The growing number of high-speed data centers worldwide is another tailwind. Given the upbeat scenario, the industry is anticipated to remain on the growth trajectory, backed by efforts to reinforce the 5G strength.Zacks Industry Rank Indicates Bright ProspectsThe Zacks Electronics – Testing Equipment industry is housed within the broader Zacks Computer and Technology sector. It carries a Zacks Industry Rank #75 at present, which places it in the top 30% of more than 250 Zacks industries.The group’s Zacks Industry Rank, basically the average of the Zacks Rank of all the member stocks, indicates solid near-term prospects. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than two to one.The industry’s position in the top 50% of the Zacks-ranked industries is a result of a positive earnings outlook for the constituent companies in aggregate. Looking at the aggregate earnings estimate revisions, it appears that analysts are optimistic about this group’s earnings growth potential. The industry’s earnings estimates for 2024 have moved up by 1.2% since July 31, 2024.Before we present a few stocks worth considering for your portfolio, let us look at the industry’s recent stock-market performance and the valuation picture.Industry Underperforms S&P 500 & SectorThe Zacks Electronics – Testing Equipment Industry has underperformed the S&P 500 and its sector over the past year. The industry has returned 15% over this period against the S&P 500’s appreciation of 32.2% and the broader sector’s return of 37.5%.Industry's Current ValuationBased on the forward 12-month price-to-earnings ratio (P/E), a commonly used multiple for valuing the Electronics – Testing Equipment stocks, the industry is currently trading at 24.45X, higher than the S&P 500’s 22.79X and lower than the sector’s 26.07X.Over the past five years, the industry has traded as high as 25.75X and as low as 22.97X, with a median of 23.85X.3 Testing Equipment Stocks to WatchItron: This Liberty Lake, WA-based entity is gaining from rising trends in electrification, gas safety, energy transition, grid edge digitalization and water efficiency. Increasing demand for smart water meters and electric solutions is contributing well. Strength in the Networked Solutions business, bolstered by new projects and ongoing large-scale deployments, augurs well.This Zacks Rank #2 (Buy) company is riding on new product launches and solid uptake of the Grid Edge Intelligence solution. Higher recurring revenue streams, services and software are expected to boost the Outcomes segment’s performance. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.Shares of Itron have appreciated 53.5% year to date. The Zacks Consensus Estimate for 2024 earnings has been revised a penny upward in the past 30 days to $1.05 per share, indicating year-over-year decline of 14.63%.AMETEK: This Berwyn, PA-based player is gaining from solid contributions from the Navitar, Alphasense, Magnetrol International and Crank Software acquisitions, which are driving growth in its Electronic Instruments segment. Benefits from the Paragon Medical and Bison Engineering buyouts are aiding the Electromechanical segment. The acquisitions of United Electronic Industries and Amplifier Research are expected to contribute generously to AMETEK’s top-line growth in the days ahead.AME manufactures electronic appliances and electromechanical devices. The company remains optimistic about its AMETEK Growth Model. The proper execution of this Zacks #3 Ranked (Hold) player’s four core growth strategies, namely operational excellence, global market expansion, investments in product development and acquisitions, are expected to continue aiding its financial performance in the near term.AMETEK has returned 16.1% year to date. The Zacks Consensus Estimate AME’s 2024 earnings has been unchanged over the past 30 days at $6.80 per share, indicating year-over-year growth of 6.58%.Fortive: The Everett, WA-based company is a diversified industrial growth company. It provides essential technologies for connected workflow solutions on a global basis.Strength across Intelligent Operating Solutions and Advanced Healthcare segments has been aiding Fortive’s performance. Fortive continues to expect double-digit growth in both earnings and cash flow in 2024.FTV shares have appreciated 7.1% in the year-to-date period. The Zacks Consensus Estimate for this Zacks Rank #3 company’s 2024 earnings has inched up by a penny to $3.85 per share over the past 30 days, suggesting year-over-year growth of 12.24%.Why Haven't You Looked at Zacks' Top Stocks?Since 2000, our top stock-picking strategies have blown away the S&P's +7.0 average gain per year. Amazingly, they soared with average gains of +44.9%, +48.4% and +55.2% per year.Today you can access their live picks without cost or obligation.See Stocks Free >>Media ContactZacks Investment Research800-767-3771 ext. 9339support@zacks.comhttps://www.zacks.comPast performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.Zacks Naming Top 10 Stocks for 2025Want to be tipped off early to our 10 top picks for the entirety of 2025?History suggests their performance could be sensational.From 2012 (when our Director of Research Sheraz Mian assumed responsibility for the portfolio) through November, 2024, the Zacks Top 10 Stocks gained +2,112.6%, more than QUADRUPLING the S&P 500’s +475.6%. Now Sheraz is combing through 4,400 companies to handpick the best 10 tickers to buy and hold in 2025. Don’t miss your chance to get in on these stocks when they’re released on January 2.Be First to New Top 10 Stocks >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Itron, Inc. (ITRI): Free Stock Analysis Report AMETEK, Inc. (AME): Free Stock Analysis Report Fortive Corporation (FTV): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks