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Here's Why Terex (TEX) Stock is an Attractive Pick Right Now
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Terex Corporation (TEX - Free Report) is well poised for growth on the back of robust customer demand. Focus on cost-control actions, strategic growth initiatives, investment in innovative products and digital innovation continue to aid the company. These factors position the company as a promising investment option at the moment.
The company currently sports a Zacks Rank #1 (Strong Buy) and has a VGM Score of A. Our research shows that stocks with a VGM Score of A or B, when combined with a Zacks Rank #1 or 2 (Buy), offer the best investment opportunities. You can see the complete list of today’s Zacks #1 Rank stocks here.
Let's delve deeper into the factors that make the Terex stock a compelling investment option at the moment.
Earnings & Sales Top Estimates in Q2
Terex reported second-quarter 2021 adjusted earnings per share of $1.02, which beat the Zacks Consensus Estimate of 53 cents. The bottom line turned around from the prior-year quarter’s loss of 5 cents per share. Revenues of $1,039 million increased 50% year over year and surpassed the consensus mark of $993 million.
Impressive Price Performance
The stock has gained 33.8% so far this year, outperforming the industry’s growth of 15.8%.
Image Source: Zacks Investment Research
Positive Earnings Surprise Trend
The company has a trailing four-quarter earnings surprise of 307.3%, on an average.
Positive Outlook
Terex projects earnings per share for 2021 in the range of $2.85 and $3.05, higher than the previous guidance of $2.35 to $2.55. The guidance reflects a substantial improvement from the earnings of 13 cents reported in 2020. The company projects sales of $3.9 billion for the current year, up from its previous estimate of $3.7 billion. The updated sales guidance indicates year-over-year growth of 27%.
Upbeat Growth Projections
The Zacks Consensus Estimate for the 2021 earnings per share is currently pegged at $3.00, indicating a surge of 2,207.6% from the prior year. The same for 2022 stands at $4.30, suggesting an improvement of 43.1%, year over year.
Other Growth Drivers
Terex has made significant progress in its “Execute, Innovate, Grow” strategy. Per the “Execute” theme, the company continues the progress made with its “Execute to Win” by intensifying process discipline and implementing several new operational processes, among other initiatives. The “Innovate” factor emphasizes on continuously developing its product offerings and applying technology. The company has invested in connected assets and digital capabilities to better serve customers. The “Grow” aspect focuses on increasing inorganic investment and adding scope thorough acquisitions. This strategy will fuel the company’s growth in the years to come.
Terex’s Aerial Work Platforms segment is poised to gain from the company’s efforts to right-size its cost structure, in line with customer demand, operational execution, strengthening global footprint and innovative new products over the long haul. The segment is witnessing continued solid global demand driven by fleet replacement and growth. In the Genie business globally, rental rates are rising, used equipment pricing remains strong, and fleet utilization continues to improve on the recovering aerials rental industry. The Utilities market is improving significantly aided by strong demand across its end-markets of tree care, rental, and investor-owned utilities. The company projects 2021 segment sales of $2,175 million, up 22% from the $1,783 million seen in 2020, on improving end markets.
In the Material Processing segment, robust end-market demand across minerals processing, material handling and lifting, environmental, and concrete will drive revenues. A solid product pipeline, expansion into newer geographies, delivering innovative products and continued strong execution position the segment well for growth. Given the healthy end-market demand, this segment is anticipated to report net sales of around $1,700 million, suggesting year-over-year growth of 35%.
Additionally, the company is focused on maintaining a solid liquidity and cash position, positioning it well to sail through the global health crisis. Terex continues to invest in innovative products and expansion of manufacturing facilities to fuel growth. Management has implemented several cost-reduction actions to preserve cash. It also reduced its capital expenditure while continuing to fund growth capital projects. Terex has been executing company-wide SG&A cost-reduction initiatives.
Other Stocks to Consider
A few other top-ranked stocks in the Industrial Products sector include Encore Wire Corporation (WIRE - Free Report) , Deere & Company (DE - Free Report) and Lincoln Electric Holdings, Inc. (LECO - Free Report) . While Encore Wire and Deere sport a Zacks Rank #1, Lincoln Electric carries a Zacks Rank #2, at present.
Encore Wire has a projected earnings growth rate of 332.6% for fiscal 2021. So far this year, the company’s shares have gained 45%.
Deere has an estimated earnings growth rate of 117.5% for fiscal 2021. The company’s shares have gained 36.3% so far this year.
Lincoln Electric has an expected earnings growth rate of 45.1% for 2021. The stock has appreciated 22%, year to date.
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Here's Why Terex (TEX) Stock is an Attractive Pick Right Now
Terex Corporation (TEX - Free Report) is well poised for growth on the back of robust customer demand. Focus on cost-control actions, strategic growth initiatives, investment in innovative products and digital innovation continue to aid the company. These factors position the company as a promising investment option at the moment.
The company currently sports a Zacks Rank #1 (Strong Buy) and has a VGM Score of A. Our research shows that stocks with a VGM Score of A or B, when combined with a Zacks Rank #1 or 2 (Buy), offer the best investment opportunities. You can see the complete list of today’s Zacks #1 Rank stocks here.
Let's delve deeper into the factors that make the Terex stock a compelling investment option at the moment.
Earnings & Sales Top Estimates in Q2
Terex reported second-quarter 2021 adjusted earnings per share of $1.02, which beat the Zacks Consensus Estimate of 53 cents. The bottom line turned around from the prior-year quarter’s loss of 5 cents per share. Revenues of $1,039 million increased 50% year over year and surpassed the consensus mark of $993 million.
Impressive Price Performance
The stock has gained 33.8% so far this year, outperforming the industry’s growth of 15.8%.
Image Source: Zacks Investment Research
Positive Earnings Surprise Trend
The company has a trailing four-quarter earnings surprise of 307.3%, on an average.
Positive Outlook
Terex projects earnings per share for 2021 in the range of $2.85 and $3.05, higher than the previous guidance of $2.35 to $2.55. The guidance reflects a substantial improvement from the earnings of 13 cents reported in 2020. The company projects sales of $3.9 billion for the current year, up from its previous estimate of $3.7 billion. The updated sales guidance indicates year-over-year growth of 27%.
Upbeat Growth Projections
The Zacks Consensus Estimate for the 2021 earnings per share is currently pegged at $3.00, indicating a surge of 2,207.6% from the prior year. The same for 2022 stands at $4.30, suggesting an improvement of 43.1%, year over year.
Other Growth Drivers
Terex has made significant progress in its “Execute, Innovate, Grow” strategy. Per the “Execute” theme, the company continues the progress made with its “Execute to Win” by intensifying process discipline and implementing several new operational processes, among other initiatives. The “Innovate” factor emphasizes on continuously developing its product offerings and applying technology. The company has invested in connected assets and digital capabilities to better serve customers. The “Grow” aspect focuses on increasing inorganic investment and adding scope thorough acquisitions. This strategy will fuel the company’s growth in the years to come.
Terex’s Aerial Work Platforms segment is poised to gain from the company’s efforts to right-size its cost structure, in line with customer demand, operational execution, strengthening global footprint and innovative new products over the long haul. The segment is witnessing continued solid global demand driven by fleet replacement and growth. In the Genie business globally, rental rates are rising, used equipment pricing remains strong, and fleet utilization continues to improve on the recovering aerials rental industry. The Utilities market is improving significantly aided by strong demand across its end-markets of tree care, rental, and investor-owned utilities. The company projects 2021 segment sales of $2,175 million, up 22% from the $1,783 million seen in 2020, on improving end markets.
In the Material Processing segment, robust end-market demand across minerals processing, material handling and lifting, environmental, and concrete will drive revenues. A solid product pipeline, expansion into newer geographies, delivering innovative products and continued strong execution position the segment well for growth. Given the healthy end-market demand, this segment is anticipated to report net sales of around $1,700 million, suggesting year-over-year growth of 35%.
Additionally, the company is focused on maintaining a solid liquidity and cash position, positioning it well to sail through the global health crisis. Terex continues to invest in innovative products and expansion of manufacturing facilities to fuel growth. Management has implemented several cost-reduction actions to preserve cash. It also reduced its capital expenditure while continuing to fund growth capital projects. Terex has been executing company-wide SG&A cost-reduction initiatives.
Other Stocks to Consider
A few other top-ranked stocks in the Industrial Products sector include Encore Wire Corporation (WIRE - Free Report) , Deere & Company (DE - Free Report) and Lincoln Electric Holdings, Inc. (LECO - Free Report) . While Encore Wire and Deere sport a Zacks Rank #1, Lincoln Electric carries a Zacks Rank #2, at present.
Encore Wire has a projected earnings growth rate of 332.6% for fiscal 2021. So far this year, the company’s shares have gained 45%.
Deere has an estimated earnings growth rate of 117.5% for fiscal 2021. The company’s shares have gained 36.3% so far this year.
Lincoln Electric has an expected earnings growth rate of 45.1% for 2021. The stock has appreciated 22%, year to date.