Freedom Capital Downgrades Tennant Company, Cuts Price Target to $67
Freedom Capital downgraded Tennant Company to Hold, lowering price target from $93 to $67 after deeming Q4 results weak. An ERP rollout disrupted order entry and shipping, cutting about $30 million from net sales, reducing adjusted EBITDA by $22 million and raising 2026 remediation costs above $20 million.
1. Analyst Downgrades and Price Target Cut
Freedom Capital downgraded Tennant Company from Buy to Hold and lowered its price target to $67 from $93 following a review of the company's latest quarterly performance.
2. ERP Rollout Disruption Impact
The November 2025 North America launch of a new ERP system triggered significant functionality issues that disrupted order entry, shipping, and customer service, causing about three weeks of lost machine orders and parts shipments.
3. Financial Consequences for Q4
Operational disruptions increased overtime, freight, and direct costs, reducing orders by roughly $15 million, cutting net sales by $30 million and reducing fourth-quarter adjusted EBITDA by approximately $22 million.
4. 2026 Outlook and Remediation Costs
Tennant Company expects remediation expenses to exceed $20 million in 2026—far above the initial $5 million estimate—while ongoing shipment constraints and tariff inflation continue to pressure profitability and cash flow.