Trimble could unlock $3B in value by selling its agriculture business

Trimble Inc. (NASDAQ:TRMB) may well want to think about offering its agriculture small business as a divestiture could unlock $3 billion in benefit, in accordance to Bernstein.

A potential sale of the agriculture enterprise may well unlock about $3 billion in incremental worth, representing 15%-20% upside from recent marketplace price, in accordance to Bernstein analyst Chad Dillard. The sale would also sharpen management’s concentration on design tech and it would enable Trimble it to “profitably exit an stop market place in which it will work at a greater competitive disadvantage as periods 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 note. In a sum-of-the-sections analyst Trimble is truly worth $19 billion vs the present-day marketplace worth of $16 billion.

“With these proceeds, Trimble would have ample dry powder to curate its development tech product supplying as it sees in shape via M&A and can contend in opposition to far better capitalized peers these types of as Autodesk.,” DIllard wrote. “Now is the time to take into consideration this option. Crop rates are at a history, farmers are swimming in money, all of which translate to desirable multiples for precision ag businesses.”

Previous thirty day period, Trimble agreed to divest 4 firms to aim on strategic goods.