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Here's Why You Should Retain Terex (TEX) in Your Portfolio
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Terex Corporation (TEX - Free Report) has been gaining from strong demand and improved volumes, which is evident from year-over-year growth in earnings over the past 12 quarters. TEX’s pricing actions and efforts to cut down costs have helped offset the impacts of supply-chain challenges and higher costs that have been plaguing the industry at large over this period.
Let us delve deeper and analyze the factors that make this Zacks Rank #3 (Hold) company worth holding on to at present.
Healthy Demand Drives Q4 Results: Terex reported fourth-quarter 2023 adjusted earnings per share of $1.41, which marks a year-over-year improvement of 5%. The upside was driven by healthy demand across multiple businesses and improved price realization that helped offset higher costs.
Positive Earnings Surprise History: The company has an average trailing four-quarter positive earnings surprise of 25.8%.
Optimistic Growth Projections: The Zacks Consensus Estimate for the company’s 2024 earnings has moved 0.3% upward over the past 30 days and is pegged at $6.94 per share. The consensus mark for 2025 earnings has gone up 0.7% over the past 30 days to $7.05 per share.
Upbeat FY24 Outlook: Terex expects earnings per share in the range of $6.85 to $7.25 in 2024. The company reported adjusted earnings per share of $7.06 in 2023. Terex expects sales between $5.1 billion and $5.3 billion. The company reported sales of $5.15 billion in 2023.
Price Performance: Terex's shares have gained 12.5% in the past month compared with the industry’s 9.3% growth.
Image Source: Zacks Investment Research
Solid Backlog Levels to Support Revenues: The company has been delivering year-over-year growth in earnings over the past three years, driven by the strong demand for its products across multiple businesses and all major geographies. TEX’s backlog was $3.4 billion at the end of 2023. The figure remains significantly above historical levels and is the second highest in recent history. Robust backlog and strong end-market demand are expected to support its top-line performance in the forthcoming quarters. Increased spending from the Infrastructure Bill is expected to be a major catalyst for Terex.
Strategic Initiatives Continue to Bear Fruit: The company continues to progress well on its “Execute, Innovate, Grow” strategy. In sync with this, it has been investing in innovative products, digital innovation, the expansion of manufacturing facilities and acquisitions. This will drive its performance in the forthcoming quarters.
Solid Balance Sheet: As of Dec 31, 2023, the company had $971 million of total available liquidity and a net leverage of 0.41X. It expects to generate a free cash flow of $325-$375 million in 2024 compared with a free cash flow of $366 million in 2023. Terex used $151 million in capital expenditure and growth investments in 2023. It returned $104 million to shareholders in 2023, through $61 million in share repurchases and $43 million in dividend payments. The company also raised the dividend twice by 31% in 2023.
The Zacks Consensus Estimate for Donaldson’s fiscal 2024 earnings is pegged at $3.28 per share. The consensus estimate for 2024 earnings has moved 3% north in the past 60 days and suggests year-over-year growth of 7.9%. The company has a trailing four-quarter average earnings surprise of 4.5%. DCI shares have gained 5% in the past month.
The Zacks Consensus Estimate for Eaton’s 2024 earnings is pegged at $10.15 per share. The consensus estimate for 2024 earnings has moved up 2% in the past 60 days and suggests year-over-year growth of 12.4%. The company has a trailing four-quarter average earnings surprise of 4.8%. ETN shares have gained 9% in the past month.
H&E Equipment Services has an average trailing four-quarter earnings surprise of 17.2%. The Zacks Consensus Estimate for HEES’ 2024 earnings is pinned at $5.02 per share, which indicates year-over-year growth of 5%. Estimates have gone up 3% in the past 60 days. The company’s shares have gained 15% in a month.
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Here's Why You Should Retain Terex (TEX) in Your Portfolio
Terex Corporation (TEX - Free Report) has been gaining from strong demand and improved volumes, which is evident from year-over-year growth in earnings over the past 12 quarters. TEX’s pricing actions and efforts to cut down costs have helped offset the impacts of supply-chain challenges and higher costs that have been plaguing the industry at large over this period.
Let us delve deeper and analyze the factors that make this Zacks Rank #3 (Hold) company worth holding on to at present.
Healthy Demand Drives Q4 Results: Terex reported fourth-quarter 2023 adjusted earnings per share of $1.41, which marks a year-over-year improvement of 5%. The upside was driven by healthy demand across multiple businesses and improved price realization that helped offset higher costs.
Positive Earnings Surprise History: The company has an average trailing four-quarter positive earnings surprise of 25.8%.
Optimistic Growth Projections: The Zacks Consensus Estimate for the company’s 2024 earnings has moved 0.3% upward over the past 30 days and is pegged at $6.94 per share. The consensus mark for 2025 earnings has gone up 0.7% over the past 30 days to $7.05 per share.
Upbeat FY24 Outlook: Terex expects earnings per share in the range of $6.85 to $7.25 in 2024. The company reported adjusted earnings per share of $7.06 in 2023. Terex expects sales between $5.1 billion and $5.3 billion. The company reported sales of $5.15 billion in 2023.
Price Performance: Terex's shares have gained 12.5% in the past month compared with the industry’s 9.3% growth.
Image Source: Zacks Investment Research
Solid Backlog Levels to Support Revenues: The company has been delivering year-over-year growth in earnings over the past three years, driven by the strong demand for its products across multiple businesses and all major geographies. TEX’s backlog was $3.4 billion at the end of 2023. The figure remains significantly above historical levels and is the second highest in recent history. Robust backlog and strong end-market demand are expected to support its top-line performance in the forthcoming quarters. Increased spending from the Infrastructure Bill is expected to be a major catalyst for Terex.
Strategic Initiatives Continue to Bear Fruit: The company continues to progress well on its “Execute, Innovate, Grow” strategy. In sync with this, it has been investing in innovative products, digital innovation, the expansion of manufacturing facilities and acquisitions. This will drive its performance in the forthcoming quarters.
Solid Balance Sheet: As of Dec 31, 2023, the company had $971 million of total available liquidity and a net leverage of 0.41X. It expects to generate a free cash flow of $325-$375 million in 2024 compared with a free cash flow of $366 million in 2023. Terex used $151 million in capital expenditure and growth investments in 2023. It returned $104 million to shareholders in 2023, through $61 million in share repurchases and $43 million in dividend payments. The company also raised the dividend twice by 31% in 2023.
Stocks to Consider
Some better-ranked stocks from the Industrial Products sector are Donaldson (DCI - Free Report) , Eaton (ETN - Free Report) and H&E Equipment Services (HEES - Free Report) . Each of these stocks currently carry a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for Donaldson’s fiscal 2024 earnings is pegged at $3.28 per share. The consensus estimate for 2024 earnings has moved 3% north in the past 60 days and suggests year-over-year growth of 7.9%. The company has a trailing four-quarter average earnings surprise of 4.5%. DCI shares have gained 5% in the past month.
The Zacks Consensus Estimate for Eaton’s 2024 earnings is pegged at $10.15 per share. The consensus estimate for 2024 earnings has moved up 2% in the past 60 days and suggests year-over-year growth of 12.4%. The company has a trailing four-quarter average earnings surprise of 4.8%. ETN shares have gained 9% in the past month.
H&E Equipment Services has an average trailing four-quarter earnings surprise of 17.2%. The Zacks Consensus Estimate for HEES’ 2024 earnings is pinned at $5.02 per share, which indicates year-over-year growth of 5%. Estimates have gone up 3% in the past 60 days. The company’s shares have gained 15% in a month.