Piper Sandler maintains Overweight rating on Trimble shares despite ongoing audit

Published 19/08/2024, 14:18
Piper Sandler maintains Overweight rating on Trimble shares despite ongoing audit

Piper Sandler has maintained its Overweight rating on Trimble Navigation (NASDAQ: NASDAQ:TRMB) with a steady price target of $73.00. The firm expressed confidence in the stock as their top pick for the second half of the year, anticipating a recovery once the company completes its financial audit process.

The ongoing audit has affected Trimble's stock performance in two significant ways. Firstly, it has led to reduced confidence among potential investors due to the risk of a potential financial restatement. Secondly, it has resulted in the suspension of the company's share repurchase program, which saw a decline from $175 million in buybacks in the first quarter to none in the second quarter.

The analyst from Piper Sandler highlighted that the completion of the audit could pave the way for Trimble to resume its share buyback program. This resumption, combined with the same drivers that led to the firm's earlier upgrade this year, is expected to contribute to a robust second half for Trimble's shares.

The analyst pointed out that despite the audit-related setbacks, Trimble has delivered two strong quarters of Annual Recurring Revenue (ARR), demonstrating the underlying strength of the business.

The audit process has been a significant event risk for Trimble, with its conclusion likely to be a turning point for the company. According to Piper Sandler, once the audit is finalized and the uncertainty is resolved, Trimble is poised to reactivate its share repurchase plan. The firm believes that the catalysts and factors that warranted the upgrade earlier in the year remain valid and could drive positive momentum for the stock.

Trimble, known for its advanced location-based solutions and services, has faced headwinds due to the audit, but the firm's analysis suggests a positive outlook post-audit. The expected recommencement of share buybacks is seen as a key factor that would support the stock's recovery and appeal to investors.

Piper Sandler's reiteration of the Overweight rating and $73.00 price target reflects a vote of confidence in Trimble's future performance, especially in the latter half of the year.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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