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Reasons to Add Titan International (TWI) to Your Portfolio
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Titan International, Inc.’s agriculture and earthmoving construction segments have been witnessing strong sales volume growth over the past few quarters. Farm commodity prices and the necessity to replace old equipment continue to support improved order levels for the agricultural segment. TWI will also gain from the ramp-up in the U.S. infrastructure spending.
TWI currently has a Zacks Rank #2 (Buy) and a VGM Score of A. Our research shows that stocks with a VGM Score of A or B in combination with a Zacks Rank #1 (Strong Buy) or 2 offer the best investment opportunities. You can see the complete list of today’s Zacks #1 Rank stocks here.
Solid Performance in Q3: The company witnessed an 18% year-over-year increase in net sales to $531 million in the third quarter of 2022 aided by strong performance in its segments, volume and pricing gains. This marked the strongest third-quarter sales performance in its history.
Adjusted EBITDA was $61 million in the third quarter, up 74% from last year’s tally aided by higher sales and improved operating leverage in its production facilities. Cost reduction and productivity initiatives undertaken by TWI also contributed to the improvement in profits. Earnings were 54 cents compared to the 17 cents reported in the third quarter of 2021.
Upbeat Outlook for 2022: Backed by the performance in the first three quarters of the year, TWI expects results to be near the high end of its previously stated guided range. The company had earlier provided 2022 sales guidance at $2.2 billion. Titan International had reported sales of $1.78 billion in 2021. Adjusted EBITDA range was between $240 million and $250 million for the year compared with $135 million in 2021. Overall, 2022 is emerging as the strongest year in TWI’s history. This positive momentum is expected to continue in 2023 as well.
Positive Growth Expectations: The Zacks Consensus Estimate for earnings for both 2022 and 2023 has moved up 2% over the past 60 days. The estimate for 2022 earnings currently stands at $2.22, which suggests a 161% surge from the 2021 figure. The same for 2023 stands at $2.34 per share, indicating year-over-year growth of 5.6%.
Impressive Surprise History: TWI has a trailing four-quarter earnings surprise of 49.6%, on average.
Solid ROE: TWI’s superior return on equity (ROE) is indicative of its growth potential. Titan International’s ROE currently stands at 49.9%, higher than the industry’s 32.8%. This indicates efficiency in using shareholders’ funds and the ability to generate profit with minimum capital usage.
Growth Drivers in Place
Titan International’s Agricultural segment continues to benefit from increased commodity prices and improved farmer income. The need to replace an aging large equipment fleet and replenish lower equipment inventory levels is also working in its favor. These trends are expected to boost the segment’s results next year as well.
The Consumer segment is witnessing steady higher volumes in relation to general market improvements. Recovery in construction markets has been driving the Earthmoving/Construction segment’s performance for a while. The ramp-up in the U.S infrastructure spending is expected to act as a significant catalyst in the days ahead.
Pricing actions undertaken to offset rising raw material costs and savings from productivity improvements across all production facilities are expected to contribute to TWI’s earnings growth.
Price Performance
Image Source: Zacks Investment Research
Titan International’s stock has gained 35.6% year-to-date against the industry’s 24.6% growth.
Other Stocks to Consider
Some other top-ranked stocks in the Industrial Products sector are KnowBe4 , Caterpillar Inc. (CAT - Free Report) and Hudson Technologies (HDSN - Free Report) . KNBE, CAT and OI sport a Zacks Rank of 1 at present.
KnowBe4’s earnings surprise in the last four quarters was 216.7%, on average. The Zacks Consensus Estimate for the company’s 2022 earnings is pegged at 24 cents per share, indicating a 118.2% increase year over year. The estimates have gone up 20% in the past 60 days. KNBE’s shares have gained 8% so far this year.
The Zacks Consensus Estimate for Caterpillar’s current year earnings per share is pegged at $13.85, suggesting a 28% increase from last year. The estimates have moved up by 9% in the past 60 days. It has a trailing four-quarter average earnings surprise of 14.7%. CAT’s shares have gained 16% year-to-date.
The Zacks Consensus Estimate for Hudson’s current-year earnings per share is pegged at $2.16, suggesting a 213% increase from last year. The consensus estimate moved 20.7% upward in the last 60 days. Hudson has a trailing four-quarter average earnings surprise of 297%. HDSN’s shares surged 123% so far this year.
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Reasons to Add Titan International (TWI) to Your Portfolio
Titan International, Inc.’s agriculture and earthmoving construction segments have been witnessing strong sales volume growth over the past few quarters. Farm commodity prices and the necessity to replace old equipment continue to support improved order levels for the agricultural segment. TWI will also gain from the ramp-up in the U.S. infrastructure spending.
TWI currently has a Zacks Rank #2 (Buy) and a VGM Score of A. Our research shows that stocks with a VGM Score of A or B in combination with a Zacks Rank #1 (Strong Buy) or 2 offer the best investment opportunities. You can see the complete list of today’s Zacks #1 Rank stocks here.
Solid Performance in Q3: The company witnessed an 18% year-over-year increase in net sales to $531 million in the third quarter of 2022 aided by strong performance in its segments, volume and pricing gains. This marked the strongest third-quarter sales performance in its history.
Adjusted EBITDA was $61 million in the third quarter, up 74% from last year’s tally aided by higher sales and improved operating leverage in its production facilities. Cost reduction and productivity initiatives undertaken by TWI also contributed to the improvement in profits. Earnings were 54 cents compared to the 17 cents reported in the third quarter of 2021.
Upbeat Outlook for 2022: Backed by the performance in the first three quarters of the year, TWI expects results to be near the high end of its previously stated guided range. The company had earlier provided 2022 sales guidance at $2.2 billion. Titan International had reported sales of $1.78 billion in 2021. Adjusted EBITDA range was between $240 million and $250 million for the year compared with $135 million in 2021. Overall, 2022 is emerging as the strongest year in TWI’s history. This positive momentum is expected to continue in 2023 as well.
Positive Growth Expectations: The Zacks Consensus Estimate for earnings for both 2022 and 2023 has moved up 2% over the past 60 days. The estimate for 2022 earnings currently stands at $2.22, which suggests a 161% surge from the 2021 figure. The same for 2023 stands at $2.34 per share, indicating year-over-year growth of 5.6%.
Impressive Surprise History: TWI has a trailing four-quarter earnings surprise of 49.6%, on average.
Solid ROE: TWI’s superior return on equity (ROE) is indicative of its growth potential. Titan International’s ROE currently stands at 49.9%, higher than the industry’s 32.8%. This indicates efficiency in using shareholders’ funds and the ability to generate profit with minimum capital usage.
Growth Drivers in Place
Titan International’s Agricultural segment continues to benefit from increased commodity prices and improved farmer income. The need to replace an aging large equipment fleet and replenish lower equipment inventory levels is also working in its favor. These trends are expected to boost the segment’s results next year as well.
The Consumer segment is witnessing steady higher volumes in relation to general market improvements. Recovery in construction markets has been driving the Earthmoving/Construction segment’s performance for a while. The ramp-up in the U.S infrastructure spending is expected to act as a significant catalyst in the days ahead.
Pricing actions undertaken to offset rising raw material costs and savings from productivity improvements across all production facilities are expected to contribute to TWI’s earnings growth.
Price Performance
Image Source: Zacks Investment Research
Titan International’s stock has gained 35.6% year-to-date against the industry’s 24.6% growth.
Other Stocks to Consider
Some other top-ranked stocks in the Industrial Products sector are KnowBe4 , Caterpillar Inc. (CAT - Free Report) and Hudson Technologies (HDSN - Free Report) . KNBE, CAT and OI sport a Zacks Rank of 1 at present.
KnowBe4’s earnings surprise in the last four quarters was 216.7%, on average. The Zacks Consensus Estimate for the company’s 2022 earnings is pegged at 24 cents per share, indicating a 118.2% increase year over year. The estimates have gone up 20% in the past 60 days. KNBE’s shares have gained 8% so far this year.
The Zacks Consensus Estimate for Caterpillar’s current year earnings per share is pegged at $13.85, suggesting a 28% increase from last year. The estimates have moved up by 9% in the past 60 days. It has a trailing four-quarter average earnings surprise of 14.7%. CAT’s shares have gained 16% year-to-date.
The Zacks Consensus Estimate for Hudson’s current-year earnings per share is pegged at $2.16, suggesting a 213% increase from last year. The consensus estimate moved 20.7% upward in the last 60 days. Hudson has a trailing four-quarter average earnings surprise of 297%. HDSN’s shares surged 123% so far this year.