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BLOOMINGTON, Minn. - The Toro Company (NYSE:TTC), currently valued at $7.3 billion, announced Thursday it has divested its Trencor equipment brand and the auger boring product category from its American Augers brand. Financial terms of the transactions were not disclosed. According to InvestingPro data, Toro maintains a strong financial position with liquid assets exceeding short-term obligations and operates with a moderate level of debt.
The company will continue manufacturing American Augers’ underground equipment line, including large horizontal directional drills, pumps and fluid cleaning systems at its West Salem, Ohio, facility. The Trencor divestiture includes assets related to large-track trenchers and mining equipment.
"Today’s announcement within our construction portfolio places additional focus on the core underground categories that will provide the greatest growth opportunity," said Peter Moeller, group vice president of Construction Businesses at Toro.
The company indicated the strategic moves align with its commitment to disciplined portfolio management and capital allocation strategies. Toro aims to enhance competitiveness in its core underground construction markets by focusing on efficiency improvements and synergy gains. The company’s financial health appears robust, with a return on equity of 25% and an Altman Z-Score of 5.18, indicating strong financial stability. InvestingPro analysis suggests the stock is currently trading below its Fair Value, with 8 additional exclusive insights available to subscribers.
Both Trencor and American Augers became part of Toro through its acquisition of Charles Machine Works in 2019, which also included the Ditch Witch brand and other underground construction businesses. Revenue from the divested business components had previously been included in Toro’s professional segment results.
Toro, with reported net sales of $4.6 billion in fiscal 2024, provides solutions for outdoor environments including turf maintenance, underground utility construction, and irrigation systems. The company has maintained dividend payments for 42 consecutive years and boasts a current dividend yield of 2.04%. The company’s global presence extends to more than 125 countries through various brands including Ditch Witch, Exmark, and BOSS, according to the press release statement. Detailed analysis of Toro’s performance metrics and growth potential is available in the comprehensive Pro Research Report, part of the InvestingPro subscription covering over 1,400 US stocks.
In other recent news, Toro Company reported its fiscal second-quarter 2025 earnings, surpassing expectations with an adjusted earnings per share (EPS) of $1.42, compared to the projected $1.38. However, the company’s consolidated net sales were slightly below expectations, coming in at $1.32 billion against the anticipated $1.35 billion, indicating a modest year-over-year decline. In addition to its earnings report, Toro announced $200 million in share buybacks year-to-date. Following these financial results, DA Davidson adjusted its price target for Toro to $76 from $80, maintaining a Neutral rating on the stock. Meanwhile, Northland analysts downgraded Toro from Outperform to Market Perform after the company reduced its full-year guidance, citing weakening residential demand and tariffs. Northland also lowered its price target for Toro to $80 from $100. These developments reflect the analysts’ assessments of Toro’s market position and potential future performance.
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