Veralto Corp (VLTO) Stock Forecast & Price Target

Veralto demonstrated strong operational performance in 2024, with organic revenues increasing by 5.1% year-over-year and core sales in North America rising by 6.9%, supported by robust growth in both the Product Quality and Innovation (PQI) and Water Quality segments. Management's expectation for a 30 basis point expansion in operating margins in the fourth quarter of 2025 indicates continued profitability improvement driven by these segments. Additionally, a high single-digit percentage growth in recurring revenue, fueled by increased demand for consumables and services, further underscores Veralto's positive financial trajectory.

Veralto's outlook is negatively influenced by a decline in adjusted operating margins, which fell 10 basis points year-over-year to 23.9%, and updated guidance indicating further pressure on margins by 25 basis points at the high end. The company faces multiple challenges, including poor economic conditions that may reduce customer demand, potential integration issues from acquisitions, and inflationary pressures that can disrupt their supply chain and overall operating performance. Additionally, increased competition and regulatory uncertainties present further risks that could impede Veralto’s ability to achieve growth and maintain market share.