Freedom Broker has initiated coverage of Tennant Co., a small-cap maker of professional cleaning equipment, with a "buy" rating and a target price implying about 12% upside versus the current market price. Freedom Broker analysts pointed to Tennant’s stable revenue base, low leverage, and strong balance sheet, which support ongoing share buybacks and dividends.
Details
In a note seen by Oninvest, Freedom Broker has initiated coverage of Tennant Co. with a "buy" rating and a $93 per share target price, about 12% above yesterday's closing price of $82.88 per share.
Tennant, a global leader in professional cleaning equipment and parts, operates what Freedom Broker calls the industry’s “most extensive” field service network. With a market capitalization of roughly $1.5 billion, the company has posted five consecutive quarters of order growth at or above long-term targets, including a 4% increase in the second quarter. Freedom Broker pointed to sustained margins and a reaffirmed full-year outlook as evidence of operational discipline.
The company generates strong free cash flow and maintains a low debt load, meaning it can investment in modernization while returning capital to shareholders through buybacks and dividends, Freedom Broker argues. In the second quarter, cash flow rose nearly 21% year over year to $22.5 million. Tennant returned $18.8 million to shareholders in the period.
Risks
Freedom Broker highlighted two main risks for Tennant investors. The first stems from Tennant’s multiyear modernization program, which has already consumed about $37 million of capital. Any delays, overruns, or execution missteps could raise administrative expenses and weigh on profitability and cash flow, Freedom Broker wrote. In the second quarter, general and administrative costs were up slightly year over year at $93.7 million, for net revenue of $318.6 million.
The second risk is external pressures, including potential increases in production costs, tariffs, and supply-chain disruptions. Freedom Broker also noted that competition and rapid technology cycles demand continuous innovation to defend market share.
Stock performance
Since the start of 2025, Tennant shares have added 1.7%, but over the last 12 months they are still down nearly 15.0%.
Only two Wall Street analysts cover the company, both recommending Tennant as a "buy," according to MarketWatch. Their average target price is $111 per share, implying upside of almost 34% from the August 26 closing price.
The AI translation of this story was reviewed by a human editor.
