Investing.com -- Across the industrial technology space, TD Cowen analysts see Zebra Technologies Corporation (NASDAQ:ZBRA) and Cognex (NASDAQ:CGNX) as the most directly affected companies by the newly announced sweeping tariffs.
Meanwhile, Roper Technologies (NASDAQ:ROP), Teledyne Technologies (NYSE:TDY), and Mueller Water Products (NYSE:MWA) are considered least impacted, with Flowserve (NYSE:FLS), Pentair (NYSE:PNR), and Symbotic (NASDAQ:SYM) expected to see less pressure than most.
In a recent note, TD Cowen reviewed public commentary from companies on tariffs, assessed how much of the impact is already reflected in current guidance, and shared insights based on recent company and investor conversations.
“Results have been harsh, and in many cases pile on top of recent losses,” the bank's analysts said.
TD Cowen used Zebra as a case study to quantify the potential earnings risk. Based on Q4 commentary, roughly half of Zebra’s $2 billion in cost of goods sold (COGS) originates from the U.S., with about $300 million sourced from China and $120 million from Mexico.
Initial tariffs—10% on China and 25% on Mexico—were already included in prior guidance. However, new reciprocal tariffs—34% on China and a similar average on non-China Asia—affect the remaining $580 million in COGS.
TD Cowen estimates the incremental tariff impact at $330 million annualized, not currently reflected in the company’s outlook.
“The change in FX today vs. 4Q implies a benefit of ~$100MM annualized,” the analysts said, adding that the residual $230 million burden would need to be absorbed through pricing actions and cost discipline. A 5% price increase, combined with expense levels reverting to 2023, could fully offset the impact.
Using a more conservative 2024 scenario—factoring in 75% of the tariff and FX effects, a 3% price increase, and $50 million in operating expense (opex) savings—TD Cowen estimates a net hit of just under $80 million, or about $1.20 per share in EPS, roughly 8% of the full-year guidance.
Zebra shares tumbled 17% on Thursday and are now down more than 40% from pre-Q4 levels. According to TD Cowen analysts, this “seems excessive on a guide already incorporating a weak/uncertain demand environment.”
