RALEIGH, N.C. - Vontier Corporation (NYSE: VNT), a global industrial technology company, has announced an agreement with Goldman Sachs (NYSE:GS) to repurchase $100 million of its common stock in an accelerated share repurchase (ASR) transaction. This buyback is part of a broader $500 million share repurchase program that was first introduced in May 2021 and refreshed in May 2022.
President and CEO Mark Morelli expressed confidence in the company's strategic direction and its potential for value creation, emphasizing Vontier's strong positioning in attractive markets and its commitment to enhancing shareholder value. The company aims to balance capital returns with investments aimed at profitable growth and the transformation of the mobility ecosystem.
The repurchase, which will be funded by Vontier's available cash, is expected to be finalized during the third quarter of 2024. The exact number of shares to be repurchased will depend on the stock's volume-weighted average price during the ASR period, adjusted according to the ASR terms.
Following this transaction, Vontier anticipates having approximately $190 million left in its current repurchase authorization. Future repurchases, which are contingent on various factors such as the company's performance, stock price, and market conditions, may be conducted through open market purchases, 10b5-1 plans, additional ASR programs, or private transactions.
Vontier is known for its focus on productivity, automation, and multi-energy technologies, catering to the evolving needs of a more connected mobility ecosystem. The company boasts a strong market presence, expertise, and a diverse portfolio that supports smart, sustainable, and secure solutions.
This repurchase initiative is based on a press release statement from Vontier Corporation.
In other recent news, Vontier Corporation reported mixed Q2 results for 2024, attributing the shortfall to macroeconomic uncertainty and project delays.
Despite these challenges, the company saw a slight increase in core order growth and improved gross margins. Vontier's strategy to streamline costs through a business simplification program has already yielded $12 million in savings this year.
The company's financial health remains strong, as indicated by a net leverage ratio of 2.7 times. Vontier plans to prioritize share buybacks in the latter half of the year.
For the upcoming quarter, the company forecasts core growth between -2% and +2%, with earnings per share (EPS) expected to range from $0.67 to $0.71.
Looking ahead to the full year, Vontier anticipates revenue between $2.9 billion and $3 billion and EPS between $2.80 and $3.00. The company is also focusing on its connected mobility strategy and expanding into adjacent markets. These developments reflect Vontier's ongoing efforts to navigate market challenges and position itself for future growth.
InvestingPro Insights
As Vontier Corporation (NYSE: VNT) embarks on a strategic buyback of its common stock, the company's financial health and market performance come into focus. With a market capitalization of approximately $5.08 billion, Vontier's commitment to shareholder value is underscored by its high shareholder yield, a noteworthy InvestingPro Tip that aligns with the company's repurchase program. Additionally, the stock's recent movement into oversold territory, as indicated by the Relative Strength Index (RSI), suggests that the timing of the buyback could be opportunistic for the company.
In terms of valuation, Vontier currently trades at a P/E ratio of 12.7, reflecting a potential value opportunity when paired with near-term earnings growth. This is further complemented by a low PEG ratio of 0.33, which suggests that the stock may be undervalued based on its earnings growth projections. With analysts predicting profitability for the year and the company having remained profitable over the last twelve months, these metrics provide a backdrop of financial stability as Vontier navigates its share repurchase strategy.
The recent price performance has seen a significant decline over the past week, with a 1-week price total return of -16.13%. Despite this, the company's long-term prospects are bolstered by its solid gross profit margin of 48.15% and an operating income margin of 18.76% over the last twelve months. For investors seeking additional insights, there are over six InvestingPro Tips available, including more detailed analyst revisions and valuation metrics, which can be found at InvestingPro's dedicated Vontier page: https://www.investing.com/pro/VNT.
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