Trimble Inc. (NASDAQ:TRMB) might want to consider advertising its agriculture organization as a divestiture could unlock $3 billion in worth, according to Bernstein.
A likely sale of the agriculture organization may well unlock about $3 billion in incremental price, representing 15%-20% upside from current market price, according to Bernstein analyst Chad Dillard. The sale would also sharpen management’s concentrate on design tech and it would allow Trimble it to “profitably exit an close market in which it will work at a increased aggressive downside as instances goes on.”
On a standalone basis, the precision ag business enterprise is valued at about $5.6 billion, Bernstein’s Dillard, who has an outperform ranking and $95 selling price concentrate on on TRMB, wrote in a take note. In a sum-of-the-pieces analyst Trimble is truly worth $19 billion vs the current market price of $16 billion.
“With these proceeds, Trimble would have adequate dry powder to curate its construction tech product or service providing as it sees healthy through M&A and can compete towards far better capitalized friends this kind of as Autodesk.,” DIllard wrote. “Now is the time to consider this choice. Crop rates are at a history, farmers are swimming in hard cash, all of which translate to attractive multiples for precision ag organizations.”
Last month, Trimble agreed to divest 4 organizations to aim on strategic merchandise.