Veralto Q2 results beat estimates on industrial water treatment demand; raises outlook

Overview

• Water and product quality solutions provider's Q2 sales rose 7.6%, beating analyst expectations

• Adjusted EPS for Q2 increased 19% and beat analyst expectations

• Company raised full-year adjusted EPS guidance following strong Q2 performance

Outlook

• Veralto raised 2026 core sales growth guidance to 4.0%-4.5% from 3.0%-4.5%

• Company now expects 2026 adjusted EPS of $4.35-$4.43, up from $4.20-$4.28

• Veralto sees Q3 core sales growth of 4.0%-5.0% and adjusted EPS of $1.06-$1.09

Result Drivers

• WATER QUALITY DEMAND - Co said strong demand for industrial water treatment, water reuse, and environmental water monitoring drove Water Quality segment growth

• DIGITAL SOLUTIONS GROWTH - Co said digital workflow solutions in packaging and color delivered strong underlying growth in PQI segment

• TARIFF REFUNDS - Q2 results included a benefit from recoveries of tariffs previously collected under IEEPA, contributing about $0.05 per share to adjusted EPS

Company press release: ID:nPn23qb0Sa

Key Details

Analyst Coverage

• The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 12 "strong buy" or "buy", 8 "hold" and no "sell" or "strong sell"

• The average consensus recommendation for the environmental services & equipment peer group is "buy"

• Wall Street's median 12-month price target for Veralto Corp is $105.79, about 12.2% above its July 27 closing price of $94.28

• The stock recently traded at 21 times the next 12-month earnings vs. a P/E of 21 three months ago

Reuters Recommended Reads

• July 28 - Xylem raises annual profit forecast as AI growth lifts demand for water-treatment equipment

• July 28 - Ecolab raises annual profit forecast on pricing, high-tech demand

• July 28 - Zurn Elkay Water Q2 sales beat estimates

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(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)