Analyst Adela Dashian of Jefferies maintained a Hold rating on Tomra Systems ASA, retaining the price target of NOK155.00.
Elevate Your Investing Strategy:
- Take advantage of TipRanks Premium at 50% off! Unlock powerful investing tools, advanced data, and expert analyst insights to help you invest with confidence.
Adela Dashian has given her Hold rating due to a combination of factors related to Tomra Systems ASA’s recent strategic move. The company announced the acquisition of C&C, a prominent US provider of bag drop solutions, which is expected to bolster Tomra’s Collection segment and expand its footprint in North America, a region that contributes significantly to its Collection revenue.
While the acquisition appears to strategically enhance Tomra’s offerings and competitive stance in a vital growth market, the transaction is debt-financed, which may pose financial risks. The deal, valued at USD 45 million upfront with potential performance-based earn-outs, suggests a cautious approach as it implies a ’27 EV/EBITA multiple of less than 10x. Despite the growth potential and operational synergies anticipated from this acquisition, the financial implications and execution risks warrant a Hold rating.
Dashian covers the Industrials sector, focusing on stocks such as Tomra Systems ASA, Munters Group AB, and Systemair AB. According to TipRanks, Dashian has an average return of 2.0% and a 37.50% success rate on recommended stocks.