Terex Corporation TEX looks promising at the moment on positive market dynamics and product and backlog strength. We are positive on the company’s prospects and believe this is the right time to add the stock to your portfolio, as it is poised to carry the bullish momentum ahead.
Let’s delve deeper into the factors that make Terex an attractive investment option.
What’s Working in Favor of Terex?
Solid Q3: Terex reported third-quarter 2017 adjusted earnings per share of 50 cents, comfortably beating the Zacks Consensus Estimate of 36 cents by a wide margin of 39%. In addition, earnings jumped a whopping 194% year over year. Revenues also improved 5% year over year in the quarter beating the Zacks Consensus Estimate.
Upbeat Guidance: Terex raised its earnings per share guidance for 2017, reflecting upbeat market dynamics and improved operational expectations for the fourth quarter. Adjusted earnings per share are now projected in the range of $1.20-$1.30. The mid-point of the guidance range reflects 42% year-over-year growth. For 2017, the company remains on track to implement the strategy to focus and simplify the company, and build capabilities in key commercial and operational areas.
Ahead of the Industry: Terex has outperformed the industry with respect to price performance in a year’s time. Shares of the company have gained around 48.7%, while the industry registered growth of 48.1%.
Impressive Surprise History: Terex outpaced the Zacks Consensus Estimate in each of the trailing four quarters. The company has an impressive average positive earnings surprise of 135.92%.
Estimates Moving Up: Annual estimates for Terex have moved up in the past 30 days, reflecting analysts’ confidence in the stock, following upbeat third-quarter results. During this period, the Zacks Consensus Estimate for 2017 moved up nearly 11.2% to $1.29. The Zacks Consensus Estimate for 2018 also moved 8.7% upward to $2.24.
Growth Drivers: Terex is poised to gain from its continued focus on capital-allocation strategy and cost-saving initiatives. The company continues to return capital to shareholders through share repurchases. Further, its backlog will grow on the back of continued focus on product development. Moreover, robust product development pipeline across Terex’s Cranes businesses will continue to bring new differentiated products to the market over the months and years ahead. It has an estimated long-term earnings growth rate of 11.3%.
Zacks Rank & Other Stocks to Consider
Terex currently sports a Zacks Rank #1 (Strong Buy).
Other top-ranked stocks in the industrial product space include Caterpillar Inc. CAT, H&E Equipment Services, Inc. HEES and Komatsu Ltd. KMTUY. While Caterpillar and H&E Equipment Services also flaunt a Zacks Rank of 1, Komatsu carries a Zacks Rank of 2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Caterpillar has a long-term earnings growth rate of 10.3%. Its shares have been up 49.9% year to date.
H&E Equipment Services has a long-term earnings growth rate of 15.6%. So far this year, its shares have rallied 57.7%.
Komatsu has a long-term earnings growth rate of 16.2%. Its shares have gained 37.6% year to date.
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