Jefferies Reiterates Hold Rating on Tennant Company (TNC)

Jefferies & Company is out with a research report this morning, where it reiterates its Hold rating on Tennant Company TNC; it has a $38.00 price target on the stock, up from $35.00. The Jefferies analysts said that they believe the company's ec-H2O platform will continue to drive sales (organic sales growth has averaged 9% over the last 4 quarters). The analysts said, “TNC has faced easy comparisons, but we believe it can sustain mid-to-upper single digit sales growth through 2012.” Jefferies also noted increases in operating margins as a further positive. As for valuation, the analysts noted, “We believe TNC's fundamental metrics trail its peers. The stock has historically traded at a premium to peers, which we attribute to its underearning last decade. We believe TNC should trade at par with peers. Our YE11 target price of $38 is so derived.”