Overview
Stifel has reaffirmed its Buy rating on Veralto Corp. (NYSE: VLTO) and kept a $120.00 price target following the water analytics company's fourth-quarter 2025 financial release. The target implies roughly a 29% upside from the stock's then-current price of $92.89, while InvestingPro information notes the shares are trading close to what it identifies as fair value.
Quarterly results
Veralto reported fourth-quarter revenue of $1.40 billion, narrowly under the Street consensus of $1.41 billion but slightly ahead of Stifel's internal forecast of $1.39 billion. On the bottom line, adjusted earnings per share came in at $1.04, beating Stifel's $0.97 estimate and the Street consensus of $0.98. Separately, another reported analyst forecast put the expected EPS at $0.91, meaning the $1.04 result corresponded to a 14.29% surprise relative to that figure.
InvestingPro data included in the company's profile highlights a gross profit margin of 59.95% for Veralto, underscoring a high level of operational efficiency within its water analytics business.
Guidance and near-term outlook
For full-year 2026, Veralto initiated guidance that calls for core revenue growth in the low- to mid-single-digit range, translating to approximately $5.9 billion. That projection sits above Stifel's $5.82 billion estimate and the Street consensus of $5.84 billion. The company expects adjusted EPS between $4.10 and $4.20 for 2026.
Looking at the first quarter of 2026, Veralto forecast core sales growth between flat and low-single digits and provided adjusted EPS guidance of $0.97 to $1.01. That quarterly EPS range is slightly below Stifel's $1.03 expectation but matches the Street consensus high end of $1.01.
Analyst commentary and drivers
Stifel attributed the fourth-quarter EPS outperformance primarily to lower-than-expected corporate expenses and a reduced effective tax rate, while noting that operating income was broadly in line with the firm's model. The broker also pointed out that roughly $80 million of the 2026 revenue guidance appears to stem from the recently completed In-Situ acquisition.
Valuation metrics
InvestingPro valuation metrics cited in the company's profile show a current price-to-earnings ratio of 27.56 and a PEG ratio of 2.14, indicating the shares are trading with a relatively high P/E in relation to near-term earnings growth assumptions.
Market reaction
Despite the upside on adjusted EPS and revenue relative to some forecasts, Veralto's stock declined in after-hours trading following the earnings release. The mixed signals - an earnings beat, guidance that exceeds some analyst estimates, and valuation metrics that suggest limited upside relative to growth - underpin the varied market response.
Contextual note
The combination of an outperformance on adjusted EPS, guidance that incorporates recent acquisition contribution, and valuation measures that place the shares near fair value provide investors and sector watchers with several data points to weigh when assessing Veralto's near-term trajectory in the water analytics and industrial services segments.