The cancelled duties and recommendation became the driver of iRobot
Manufacturer of cleaning equipment, iRobot Corp. (IRBT) rose by 12.55% to $67.71 on March 24. The reason was the news about the duties, as well as a positive comment from the brokerage firm, Northland Securities. The main positive news for iRobot shareholders was the announcement that American regulators have included iRobot products in the list of exceptions when levying import duties.
Recall that during the presidency of Donald Trump, it imposed duties on imports of products manufactured in China in the United States. Then iRobot vacuum cleaner robots in the list of exceptions and were not subject to duties. But in 2021, the exceptions expired, and they forced iRobot to pay duties totaling more than $48 million, which is a significant amount — it is more than last year’s profit of the company.
On Wednesday, March 23, it became known that regulators again added iRobot products to the list of exceptions, so by the end of 2022, the company will the need to pay a fee. According to iRobot’s calculations, the duties were supposed to lead to expenses of $42–$44 million this year, now this amount can supplement the profit.
Northland Securities analyst Michael Latimore believes that the improvement in iRobot’s financial performance will have a positive impact on the company’s stock quotes.
Against this background, Northland Securities set the target price of IRBT shares at $85 and raised the recommendation from neutral to “moderately buy”. iRobot continues to improve its home cleaning automation technologies. In March 2022, the company introduced a new version of the iRobot Genius 4.0 software, which allows you to create smart indoor maps for robot vacuum cleaners.
With its help, you can configure the cleaning of specific rooms and send the robot to clean according to a schedule or by voice command via a voice assistant in a smartphone or other device. The intelligence of robots has, and now they can detect more objects, for example, clothes thrown on the floor or a towel. Such functions significantly improve the consumer experience, since it takes less time to prepare the room for cleaning.
