Veralto (VLTO) remains confident in attaining its target for H2 core growth to accelerate by 5% to 6%, supported by steady demand across end markets in Water Quality and consumer packaged goods, RBC Capital Markets said in a Thursday note.

After investor meetings with the company executives, RBC analysts noted that the company's acquisition flywheel has "shifted into a higher gear," with around $2.2 billion spent in mergers and acquisitions, as well as buybacks, since its spinoff in 2023. The recent proposed $465 million acquisition of Cleanwater1 is set to establish a new water disinfection platform alongside Trojan, the analysts said.

Core growth acceleration in H2 is expected to be driven by volumes, with pricing contributing about 2 percentage points, the analysts said. They added that the Water Quality segment is seen leading growth for period, while the Product Quality & Innovation segment is expected to benefit from "easier" year-over-year comparisons.

The company's cost optimization savings start in 2027 with a run rate of 50% for the period, and is anticipated to reach full run rate in 2028, according to the note.

RBC's rating on the company's stock is sector-perform with a price target of $109.

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