Piper Jaffray Reiterates Overweight Rating on Trimble Navigation (TRMB)
Piper Jaffray is out with an analyst note this morning, where they reiterate their Overweight rating on shares of Trimble Navigation (NASDAQ: TRMB). Analysts are citing a complete round of channel checks they recently completed.
The analysts said, “Through our discussions with dealers across the Midwest, we believe the precision ag equipment category (Field Solutions in TRMB segment reporting) is experiencing a recovery in growth this year and longer term optimism remains very much intact. As a market leader in the category, we believe TRMB is well-positioned to capitalize on these market trends and we remain confident in our FY10 Field Solutions estimates.”
Piper Jaffray also noted that the long-term outlook for the precision ag category remains bright, adding, “We remain firm believers in the long-term growth potential – both domestically and internationally – in the precision ag equipment category. Precision ag began with GPS-base field mapping and auto-steering. Domestically, these categories are reaching mainstream acceptance and the next wave of equipment - variable rate control devices that monitor seed and fertilizer application - is gaining momentum.”
They closed by saying, “While we believe fundamental trends are poised for recovery as the year unfolds, the one wild card is Europe – which accounted for 23% of FY09 revenue. We believe trends in Europe are holding up currently, but it remains to be seen if this will hold. After the stock's recent pullback, we believe Europe (& euro translation) weakness is already priced into the stock. As such, we are reiterating our Overweight rating and continue to view TRMB as our favorite cyclical recovery name with significant earnings potential should margins return to previous peak levels.”
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