TomTom Rises After Rabo Raises Recommendation
Feb. 10 (Bloomberg) -- TomTom NV, Europe's biggest maker of portable navigation devices, rose to the highest in seven months after Rabo Securities raised its recommendation, citing strong automotive sales and a potential Apple Inc. mapping deal.
TomTom advanced as much as 36 cents, or 9.7 percent to 4.04 euros in Amsterdam, the highest since June. The shares traded 9.3 percent higher at 4.03 euros as of 10:28 a.m., valuing the company at 893 million euros ($1.19 billion). TomTom shares have lost 47 percent in the past 12 months.
“TomTom's undemanding valuation does not fully reflect valuable options for shareholders,” Hans Slob, an Utrecht Netherlands-based analyst at Rabo Securities, wrote in a note to clients. Slob sees a tripling potential for business systems, a doubling potential for automotive sales, a potential Apple mapping deal, and, “last but not least, the option of an acquisition of TomTom with a high strategic premium.” Rabo raised its recommendation to “buy” from “hold.”
TomTom Chief Executive Officer Harold Goddijn is trying to increase sales of built-in navigation systems for cars as well as electronic maps and other software, as demand for portable navigation devices is falling.
The company, based in Amsterdam, recently announced deals with Samsung Electronics Co. for maps and location content and Ford Motor Co. and General Motors Co.'s Opel division for built- in navigation systems.