Back to top

Analyst Blog

This page is temporarily not available.  Please check later as it should be available shortly. If you have any questions, please email customer support at support@zacks.com or call 800-767-3771 ext.  9339.

On Dec 31, Zacks Investment Research upgraded Terex Corp. (TEX - Analyst Report), a global equipment maker, to a Zacks Rank #1 (Strong Buy).

Why the Upgrade?

On Oct 23, Terex reported third-quarter 2013 adjusted earnings of 77 cents per share, a 24% improvement year over year, mainly due to reduced interest expense and a lower effective tax rate. The results also surpassed the Zacks Consensus Estimate of 58 cents.

Backlog for orders to be filled during the next 12 months was around $1.8 billion as of Sep 30, 2013, a 7% rise year over year. Strong demand for Associated Wire Products (AWP) together with large port equipment orders for Material Handling & Port Solutions (MHPS) led to the increase.

Total debt of the company decreased to $1.8 billion as of Sep 30, 2013 from $2 billion as of Dec 31, 2012. The company expects more than $400 million in free cash flow during the year and remains committed to reducing its debt.

In addition, starting from 2014, Terex intends to realize benefits, from its actions undertaken in the third quarter to further adjust the cost structure of the MHPS and the Cranes and Construction segments.

This month Terex announced its plans of selling its truck business. The decision to offload this unit is part of Terex’s efforts to transform into a lifting and material handling solutions company. The truck business will be sold for $160 million to Volvo Construction Equipment.

Terex also declared the initiation of quarterly dividends and a share repurchase program. Its Board approved an initial quarterly dividend of 5 cents per share which was paid on Dec 20, 2013, to shareholders of record as of Dec 16, 2013. Terex intends to pay four quarterly dividends of 5 cents a share, for an aggregate of 20 cents per share, for 2014.

Additionally, Its Board sanctioned a buyback of shares worth up to $200 million till Dec 31, 2015. The dividend initiation and buyback is in line with Terex’s commitment to return wealth to shareholders and reflects its long-term growth potential and strong financial profile.

In the near term, strong backlog in the MHPS segment is likely to aid results. The company also expects to benefit from recovery in the construction sector.

Other Stocks to Consider

Other players in the farm and construction machinery industry, which look attractive at current levels, include Kubota Corporation (KUBTY), Alamo Group, Inc. (ALG - Snapshot Report) and H&E Equipment Services Inc. (HEES - Snapshot Report). While Kubota carries a Zacks Rank #1, both Alamo Group and H&E Equipment Services hold a Zacks Rank #2 (Buy).
 

Please login to Zacks.com or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research

Close

Are you a new Zacks Member or a visitor to Zacks.com?

Top Zacks Features

Learn more

Start for as little as $4.50 per trade.

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Zacks.com. Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
ANI PHARMACE ANIP 24.83 +14.85%
BITAUTO HOLD BITA 35.20 +14.40%
E HOUSECHINA EJ 10.98 +9.15%
CANADIAN SOL CSIQ 27.02 +7.34%
KNIGHTSBRIDG VLCCF 12.46 +5.41%