BMO Capital has trimmed its price objective on Veralto Corp. (NYSE: VLTO) to $108.00 from $116.00 but retained an Outperform rating on the shares. The new target still implies substantial upside versus Veralto's trading level of $93.94, though InvestingPro's Fair Value measure indicates the stock may be slightly overvalued.
In its research note, BMO highlighted investor unease about the company's near-term growth trajectory. The firm said market participants are questioning whether Veralto's current valuation is justified by its recent growth pace, and whether a series of what BMO described as "expensive" mergers and acquisitions will continue to weigh on the company’s ability to deliver the 10%+ growth that underpins its model.
InvestingPro metrics cited in the research show Veralto trading at a price-to-earnings ratio of 25.92 and a PEG ratio of 1.95, metrics that BMO interprets as a premium relative to the company's reported 5.97% revenue growth over the last twelve months.
Despite these reservations, BMO's analyst John McNulty signaled that recent market moves may have been too punitive, saying the roughly 12% slide in Veralto's stock price last week "seems overdone." The firm also pointed to several positives from the company’s recent performance.
Among the constructive points BMO highlighted were strong execution in Veralto's core business that produced what the firm called "a solid 4Q beat," positioning the company for potential outperformance in 2026, and continued exposure to a number of secular growth themes. Taken together, BMO described Veralto as being "at a crossroads," with solid fundamental execution on one hand and investor skepticism about growth rates and acquisition strategy on the other.
Separately, Veralto’s fourth-quarter 2025 results exceeded analyst expectations. The company reported adjusted earnings per share of $1.04, beating Stifel’s projection of $0.97 and the Street consensus of $0.98. Quarterly revenue was $1.4 billion, which was marginally above Stifel's expected $1.39 billion but slightly below the Street consensus of $1.41 billion.
Following the earnings report, Stifel kept a Buy rating on Veralto and initially set a $120.00 price target. Stifel later trimmed that target to $118.00 in response to what it characterized as modest guidance for 2026, while maintaining its Buy view. Stifel noted that Veralto’s 2026 EPS guidance midpoint was about 1% below consensus estimates, which prompted the price target adjustment.
These developments underscore the divergent signals analysts are weighing: recent operational beats and secular exposure versus tempered guidance and concerns over the cost and impact of acquisitions on forward growth. Investors and market participants will likely monitor execution against guidance and the company’s ability to sustain margins and revenue expansion as they reassess valuation assumptions.