Trimble Navigation (TRMB) Rated Underperform

Wedbush analysts Scott P. Sutherland and Suhail Chandy maintained their Underperform rating for shares of Trimble Navigation Limited TRMB, with a price target of $24 per share. The analysts said that with a stock price 19 times greater than their 2011 earnings per share estimate, they found Trimble Navigation Limited somewhat overvalued and expected the stock to underperform its peers. The analysts said that the investment risks for Trimble Navigation Limited stock included the possibility of increasing commodity prices, improvement of credit conditions, increasing construction projects and additional global economic recovery. The Wedbush analysts wrote, "with ongoing macro shocks in Europe, and potential for China to slow down construction, our concerns for E&C have slightly increased though we still expect ~10% growth YoY. Debt concerns in Europe and China’s attempts to cool off parts of its economy could pose some modest risks to Trimble’s E&C growth. With shares trading at 19x our 2011 EPS estimate and 13% LT EPS growth rate, we find shares somewhat overvalued and expect them to underperform peers in light of these risks."