Vontier (VNT) is poised for sustained growth driven by the expanding Internet of Things (IoT) market, industry consolidation, and a significant shift towards recurring revenue streams, according to KeyBanc analyst Katie Fleischer. Fleischer initiated coverage on Vontier with an Overweight rating and a price target of $50, reflecting a bullish long-term outlook and a valuation of 14.1 times fiscal 2026 earnings. The analyst anticipates improved earnings per share (EPS) of $3.55 in fiscal 2026, fueled by growing consumer demand and strategic margin expansion initiatives. Vontier’s success is intricately linked to the evolution of convenience retail, fueling markets, and the integration of IoT technology, alongside new payment standards and increasingly stringent environmental regulations. A key differentiator for Vontier is its iNFX platform, which is successfully capturing market share despite ongoing industry consolidation. Strategic partnerships are central to this strategy, with major players like Costco (COST), Chevron (CVX), and Shell (SHEL) expanding their locations, leveraging Vontier’s solutions. While acknowledging potential short-term unevenness in growth as customers adopt new technologies, Fleischer remains confident in the company’s ability to maintain steady momentum, underpinned by secular trends. Furthermore, the analyst expects positive developments within Vontier’s consumer-facing segments, including Repair Solutions and DRB car wash, which are currently navigating challenges related to high interest rates and inflation. As signs of stabilization and improved consumer sentiment emerge, Vontier is anticipated to benefit from increased demand in the coming quarters.

A critical element of Vontier’s growth strategy is its deliberate focus on building recurring revenue streams. The company’s target is to increase its recurring revenue proportion from approximately 30% today to 35% by fiscal 2026 and further to 40% by fiscal 2028. This strategic shift is expected to support margin expansion and potentially lead to a re-rating of the company’s valuation over time. Fleischer recognizes the limited availability of direct public comparables, but believes this focus on recurring revenue significantly strengthens Vontier’s long-term investment case. The analyst projects third-quarter revenue of $752 million and EPS of $0.77.

VNT stock experienced a slight increase, rising by 0.79% to $43.47 as of Tuesday’s close. Looking ahead, Vontier is strategically positioned to capitalize on these trends, building a resilient and diversified business model. The company’s commitment to innovation, coupled with its expanding ecosystem of partners, suggests a promising future. Continued monitoring of the IoT landscape and Vontier’s execution will be crucial in determining the company’s continued success. The analyst’s assessment highlights Vontier’s adaptability and strategic foresight, factors likely to contribute to its long-term growth potential within the dynamic mobility solutions market. Benzinga Rankings provide vital metrics on any stock – anytime. © 2025 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.