Vontier (VNT) Could Be 16% Below Fair Value Following Tesco Rollout

Why Tesco’s roll out puts Vontier back on the radar

Tesco’s decision to deploy Vontier (VNT) fuelling and payment systems across more than 700 petrol sites gives investors a fresh, concrete datapoint on this mobility technology specialist.

The rollout leans heavily on Gilbarco Veeder-Root controllers and Invenco payment terminals, tying pumps, kiosks and forecourt software into a single, data-rich setup for the UK retailer.

Vontier’s latest Tesco contract lands after a mixed run for the ticker, with the share price up 8.6% over the past 90 days but down 16.7% year to date and the 1 year total shareholder return declining 24.4%. Together, these figures point to momentum only tentatively rebuilding around US$31.48.

Scan Vontier’s Tesco deal alongside other under-the-radar infrastructure plays by checking the hand picked 40 power grid technology and infrastructure stocks.

Vontier now trades about 30% below the average analyst target and at an even steeper gap to some intrinsic value estimates. Yet the share price is still digesting a 1 year decline of 24.4%. Is that discount caution or mispricing?

Most Popular Narrative: 16% Undervalued

According to a widely followed valuation narrative on Vontier, a fair value of $37.42 sits above the recent close at $31.48, which puts Tesco’s rollout in the context of a stock already framed as discounted on fundamentals.

Vontier has inherited a proven business system of disciplined capital allocation and continuous improvement from its former parent companies, Danaher and Fortive. u The spinoff from Fortive will allow Vontier to redeploy capital to its business, as its former parent invested less than 5% of its total M&A capital in Vontier.

See why 11 investors see Vontier as 16% undervalued.

According to julio, this narrative applies a 9% discount rate and lands on that $37.42 fair value, implying Vontier trades at roughly a 16% discount on this framework.

The same work also points to recurring revenue from a large installed base as a key support, while still flagging slower core revenue growth, electric vehicle risk to retail fueling and the acquisition heavy playbook as factors that can pull in the opposite direction for the valuation story.

Result: Fair Value of $37.42 (UNDERVALUED)

Still, that setup can crack if electric vehicle adoption undercuts Vontier’s fueling exposure, or if the acquisition heavy playbook fails to create enough value.

Find out about the key risks to this Vontier narrative.

Next Steps

Mixed signals on Vontier so far, or a simple mismatch between price and narrative. If you want to move fast and ground your own view in the underlying data, start with the 4 key rewards and 1 important warning sign.

Ready to uncover more stock ideas beyond Vontier?

If Tesco’s move has you rethinking where the next opportunity might come from, do not stop at Vontier. Cast the net wider and let structured filters do the heavy lifting while you focus on judgment.

• Target stronger value opportunities by scanning companies that combine robust fundamentals with attractive pricing using the 32 high quality undervalued stocks.
• Prioritise resilience and steadier sleep at night by reviewing the 30 resilient stocks with low risk scores that screens for businesses with more resilient risk profiles.
• Hunt for tomorrow’s potential standouts early by checking the 16 high quality undiscovered gems that rarely appear on mainstream shortlists.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com