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Reasons to Hold Terex (TEX) Stock in Your Portfolio 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.
The company currently has a Zacks Rank #3 (Hold) and a VGM Score of A. Our research shows that stocks with a VGM Score of A or B, combined with a Zacks Rank #1 (Strong Buy) 2 (Buy) or 3, 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 worth holding on to at the moment.
Impressive Price Performance
Image Source: Zacks Investment Research
The stock has gained 44.8% in a year, compared with the industry’s growth of 15.7%.
Positive Earnings Surprise Trend
The company has a trailing four-quarter earnings surprise of 80.5%, on average.
Positive Outlook
Terex projects earnings per share for 2021 between $2.75 and $2.85, which reflects a substantial improvement from earnings of 13 cents reported in 2020. The company anticipates sales of $3.85 billion for the current year. The sales guidance indicates year-over-year growth of 25%.
Upbeat Growth Projections
The Zacks Consensus Estimate for the 2021 earnings per share is currently pegged at $2.80, indicating a surge of 2,054% from the prior year. The same for 2022 stands at $4.01, suggesting an improvement of 43.2% year over year.
Other Growth Drivers
Terex’s backlog has been improving over the past four quarters and surged a whopping 237% year over year to $2,725 million in third-quarter 2021. Both the segments have witnessed improvement in backlog over the past four quarters. End market demand is expected to remain strong for the remainder of this year and into 2022.
The company 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 Material Processing segment has launched 28 new products in 2021.
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 $2,130 million, up 19% from 2020, on improving end markets. Operating margin is expected at 6.8%, a substantial improvement from break-even margin in the prior year driven by the company’s cost reduction actions.
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%. The segment’s operating margin is projected at 14% compared with 11.4% in 2020, reflecting the segment’s strong operating performance.
Additionally, the company is focused on maintaining a solid liquidity and cash position, positioning it well to navigate through the global health crisis. Management has implemented several cost-reduction actions to preserve cash. It reduced its capital expenditure while continuing to fund growth capital projects. Terex has been executing company-wide SG&A cost-reduction initiatives.
Stocks to Consider
Some better-ranked stocks in the Industrial Products sector are Encore Wire Corporation (WIRE - Free Report) , SPX FLOW, Inc. (FLOW - Free Report) and Casella Waste Systems, Inc. (CWST - Free Report) . All these stocks flaunt a Zacks Rank #1, at present.
Encore Wire has an expected earnings growth rate of around 491% for the current year. The Zacks Consensus Estimate for current-year earnings has been revised upward by 37% in the past 60 days.
Encore Wire’s shares have soared 171% in the past year. The company has a trailing four-quarters earnings surprise of 271%, on average.
SPX FLOW has a projected earnings growth rate of around 101.3% for 2021. The Zacks Consensus Estimate for current-year earnings has been revised upward by 5.3% in the past 60 days.
The company’s shares have appreciated 56.9% in a year. SPX FLOW has a trailing four-quarter earnings surprise of 40.4%, on average. FLOW has a long-term earnings growth of 35.2%.
Casella Waste has an estimated earnings growth rate of around 6% for the current year. In the past 60 days, the Zacks Consensus Estimate for current-year earnings has been revised upward by 11.4%.
The company’s shares have increased 44% in the past year. Casella Waste has a trailing four-quarter earnings surprise of 42.1%, on average. CWST has a long-term earnings growth of 14.2%.
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Reasons to Hold Terex (TEX) Stock in Your Portfolio 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.
The company currently has a Zacks Rank #3 (Hold) and a VGM Score of A. Our research shows that stocks with a VGM Score of A or B, combined with a Zacks Rank #1 (Strong Buy) 2 (Buy) or 3, 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 worth holding on to at the moment.
Impressive Price Performance
The stock has gained 44.8% in a year, compared with the industry’s growth of 15.7%.
Positive Earnings Surprise Trend
The company has a trailing four-quarter earnings surprise of 80.5%, on average.
Positive Outlook
Terex projects earnings per share for 2021 between $2.75 and $2.85, which reflects a substantial improvement from earnings of 13 cents reported in 2020. The company anticipates sales of $3.85 billion for the current year. The sales guidance indicates year-over-year growth of 25%.
Upbeat Growth Projections
The Zacks Consensus Estimate for the 2021 earnings per share is currently pegged at $2.80, indicating a surge of 2,054% from the prior year. The same for 2022 stands at $4.01, suggesting an improvement of 43.2% year over year.
Other Growth Drivers
Terex’s backlog has been improving over the past four quarters and surged a whopping 237% year over year to $2,725 million in third-quarter 2021. Both the segments have witnessed improvement in backlog over the past four quarters. End market demand is expected to remain strong for the remainder of this year and into 2022.
The company 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 Material Processing segment has launched 28 new products in 2021.
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 $2,130 million, up 19% from 2020, on improving end markets. Operating margin is expected at 6.8%, a substantial improvement from break-even margin in the prior year driven by the company’s cost reduction actions.
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%. The segment’s operating margin is projected at 14% compared with 11.4% in 2020, reflecting the segment’s strong operating performance.
Additionally, the company is focused on maintaining a solid liquidity and cash position, positioning it well to navigate through the global health crisis. Management has implemented several cost-reduction actions to preserve cash. It reduced its capital expenditure while continuing to fund growth capital projects. Terex has been executing company-wide SG&A cost-reduction initiatives.
Stocks to Consider
Some better-ranked stocks in the Industrial Products sector are Encore Wire Corporation (WIRE - Free Report) , SPX FLOW, Inc. (FLOW - Free Report) and Casella Waste Systems, Inc. (CWST - Free Report) . All these stocks flaunt a Zacks Rank #1, at present.
Encore Wire has an expected earnings growth rate of around 491% for the current year. The Zacks Consensus Estimate for current-year earnings has been revised upward by 37% in the past 60 days.
Encore Wire’s shares have soared 171% in the past year. The company has a trailing four-quarters earnings surprise of 271%, on average.
SPX FLOW has a projected earnings growth rate of around 101.3% for 2021. The Zacks Consensus Estimate for current-year earnings has been revised upward by 5.3% in the past 60 days.
The company’s shares have appreciated 56.9% in a year. SPX FLOW has a trailing four-quarter earnings surprise of 40.4%, on average. FLOW has a long-term earnings growth of 35.2%.
Casella Waste has an estimated earnings growth rate of around 6% for the current year. In the past 60 days, the Zacks Consensus Estimate for current-year earnings has been revised upward by 11.4%.
The company’s shares have increased 44% in the past year. Casella Waste has a trailing four-quarter earnings surprise of 42.1%, on average. CWST has a long-term earnings growth of 14.2%.