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Bear of the Day: Titan International (TWI)

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With inflation hitting all around the world, several industries got a boost. Among them was the farming industry. Higher prices meant higher profits for many farms, but that was partially offset by higher input costs. Ancillary industries did well as a result, including manufacturing for farm equipment. However, just because a company is within a certain industry doesn’t guarantee its success.

Today’s Bear of the Day is a stock in the Manufacturing – Farm Equipment industry. It’s the Bear of the Day because of weakness in earnings estimate revisions coming from analysts on Wall Street. It is Titan International .

Titan International, Inc., together with its subsidiaries, manufactures and sells wheels, tires, and undercarriage systems and components for off-highway vehicles in North America, Latin America, Europe, the Commonwealth of Independent States region, the Middle East, Africa, Russia, and internationally. The company operates in Agricultural, Earthmoving/Construction, and Consumer segments.

The reason for the unfavorable rank is two analysts have cut estimates for the current quarter, next quarter, current year and next year over the last thirty days. The bearish moves have dropped our Zacks Consensus Estimates for the current year down from $1.83 to $1.50 while next year’s number is off from $1.89 to $1.73.

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That means that current year EPS is set to contract by 31.82% for the year, but next year marks a return to growth. Next year’s 15% growth number is a step in the right direction, yet not enough to make up for this year’s contraction. Tough for the company to provide EPS growth when revenue forecasts call for a 13.36% contraction in revenue with year.

The Manufacturing – Farm Equipment industry ranks In the Bottom 29% of our Zacks Industry Rank. There are a couple of stocks in the good graces of our Zacks Rank within this industry. They include Zacks Rank #2 (Buy) Alamo Group (ALG) and Kubota (KUBTY).


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