Freedom Capital Turns Cautious on Tennant (TNC), Downgrades Stock to Hold

Core Insights - Tennant Company (NYSE:TNC) has been included in the Dividend Kings List, highlighting its status as a reliable dividend-paying stock [1] Group 1: Downgrade and Financial Performance - Freedom Capital downgraded Tennant Company from Buy to Hold and reduced its price target from $93 to $67, citing a "weak" Q4 report [2] - The company's Q4 and full-year results were significantly impacted by the North America launch of a new ERP system, which caused serious functionality issues affecting order entry, shipping, and customer service [3] - The ERP-related disruptions resulted in a loss of approximately $15 million in orders and an overall impact of about $30 million on net sales, with adjusted EBITDA for Q4 lowered by around $22 million [4] Group 2: Remediation and Future Outlook - The company is actively working to resolve the ERP system issues, with remediation costs now expected to exceed $20 million in 2026, significantly higher than the initial estimate of $5 million [5] - The near-term profitability and cash flow of Tennant Company are under pressure due to shipment constraints, stabilization costs, and tariff inflation, which may persist into 2026 [2]