Trimble Sells Construction Unit To Command Alkon; Shares Gain 3%

Shares of Trimble closed 2.8% higher on Monday after the company announced that it has entered a definitive agreement to sell its construction logistics business to Command Alkon. The company, which anticipates the transaction to close in 4Q, hasn’t disclosed the financial terms of the deal.

Trimble’s (TRMB) construction logistics business unit forms a part of its Building and Infrastructure segment. The company stated that the divestment will not have any material impact on the segment or overall financial results.

“As we work on the execution of Trimble’s Connect and Scale 2025 strategy, we are continually evaluating our portfolio of businesses,” said Trimble CEO Rob Painter. “As we refocus our efforts on the company’s core construction capabilities, Command Alkon is an ideal fit for this opportunity with ready mix and aggregates business being key focus areas for their portfolio of offerings.” (See TRMB stock analysis on TipRanks)

On Sept. 22, Bernstein analyst Chad Dillard initiated coverage on the stock with a Buy rating and a price target of $61 (20.3% upside potential) as part of his broader US Machinery sector note. Dillard noted that the overall sector is currently trading 20% to 40% below its usual relative valuation in comparison with S&P 500.

Currently, the Street has a bullish outlook on the stock. The Strong Buy analyst consensus is based on 6 Buys and 2 Holds. With shares up 21.7% year-to-date, the average price target of $52.88 implies further upside potential of about 4.3% to current levels.