Model Update - Maintain PT - Steady But Lacking Excitement

研报英文原文证据摘录

Model Update - Maintain PT - Steady But Lacking Excitement

TD Cowen Veralto Corp

Global Research June 30, 2026

AT A GLANCE

Our Investment Thesis Forthcoming Catalysts

Despite owning high quality operating brands, we maintain a balanced view on the shares. ■ M&A deployment.

The sustainability premium has largely faded (appropriately in our view) given that only ~60% ■ In-Situ integration and analytics portfolio

of the business is water exposed and this mix may decline over time, even with consumables expansion.

representing ~2/3 of sales. Organic growth is tracking toward the low end of the range as key ■ Cyclical recovery in CPG markets.

PQI end markets remain cyclical. ■ Continued U.S. onshoring and industrial

investment trends.

Streamline initiatives should support through cycle incrementals of ~30–35%, but benefits are

■ Opportunistic share repurchases under

unlikely to materialize before 2027, and consensus already embeds ~100bps of Op margin

the $750MM authorization.

expansion. M&A remains the primary incremental growth lever (net debt <1x), with recent deals

targeting analytics driven adjacencies, though scaled water assets are limited. At current

valuation, we see no clear near-term catalyst for re-rating, with FY26 guidance broadly in line,

suggesting a more patient entry point.

Base Case Assumptions Upside Scenario Downside Scenario

■ Municipal budgets remain resilient, ■ M&A activity is robust and accelerates ■ Unclear/inefficient M&A strategy.

supported by federal initiatives. growth above expectations. ■ Multiple compression as PQI becomes

■ M&A remains a consistent but not ■ Deployment of federal infrastructure materially larger component of company.

modeled contributor to growth. funds proceeds on initial timelines. ■ Economic slowdown delays PQI