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

Tennant Company (NYSE:TNC) is included among the Dividend Kings List: Top 15 Stocks.

On February 26, Freedom Capital downgraded Tennant Company (NYSE:TNC) to Hold from Buy. The firm also lowered its price target on the stock to $67 from $93. The firm described the company’s Q4 report as “weak.” The analyst said Tennant’s near-term profitability and cash flow were affected by shipment constraints, stabilization costs, and tariff inflation. In a research note to investors, the firm added that these pressures could continue into 2026.

During the company’s Q4 2025 earnings call, CEO David Huml said both the fourth-quarter and full-year results were heavily impacted by the North America launch of a new ERP system in early November 2025. He explained that the rollout caused serious system functionality issues. These problems disrupted order entry, shipping, and customer service operations. Huml said the system took longer than expected to stabilize. As a result, the company lost about three weeks of machine order entry and parts shipping capability.

The disruptions also brought higher overtime, freight, and other direct operating costs. He added that the challenges reduced orders by roughly $15 million, mostly affecting parts, consumables, and equipment. The overall impact on net sales came to about $30 million. According to Huml, the ERP-related issues lowered fourth-quarter adjusted EBITDA by around $22 million.

The company continues to work on resolving the system problems. Huml said remediation costs are now expected to exceed $20 million in 2026, well above the original estimate of $5 million.

Tennant Company (NYSE:TNC) designs, manufactures, and markets cleaning solutions. Its products include manual and autonomous mechanized cleaning equipment used in both industrial and commercial settings. The company sells its offerings under several brands, including Tennant, Nobles, Alfa Uma Empresa Tennant, IPC, Gaomei, and Rongen, along with private-label brands.

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