Zacks Investment Research downgraded
Titan International Inc.
) to a Zacks Rank #5 (Strong Sell) on June 12, 2013.
ALAMO GROUP INC (ALG): Free Stock Analysis
CNH GLOBAL NV (CNH): Free Stock Analysis
KUBOTA CORP ADR (KUB): Get Free Report
TITAN INTL INC (TWI): Free Stock Analysis
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Why the Downgrade?
Things don't seem to be working in favor of Titan International
as its share price has gone down by 13% in the last 7 days. The
company on June 7 communicated a possible downward revision in
guidance that was provided at the end of 2012.
Management of Titan International anticipates a weak demand for
tires in the quarters ahead, especially from its customers in the
farm and construction as well as mining industries. Customers are
likely to reduce their inventory of tires that they build over
time at discounted prices. Moreover, fall in raw material costs
has lowered the selling prices of the company's products.
This has resulted in a downward revision in earnings estimate for
Titan international. In the last 7 days, the Zacks Consensus
Estimate has gone down by 12.1% to $1.89 for 2013 and 13.1% to
$2.38 for 2014.
In addition, financial results for the first quarter 2013
reported on Apr 24, 2013 were not very impressive. Adjusted net
earnings plummeted 42% year over year despite a 25% increase in
sales. Expenses, including cost of sales, SG&A, R&D and
royalty, in the quarter increased 31% year over year and
represented 92% of total revenue versus 87.3% in the year-ago
Earnings per share came in at 36 cents as compared with the
year-ago earnings of 78 cents and the Zacks Consensus Estimate of
Fall of 18.5% for year 2013 and a decline of 15.3% for 2014 have
been recorded in the Zacks Consensus Estimate in the last 60
Decreasing earnings estimates for Titan International together
with three out of four quarters of negative earnings surprise,
with an average of -26.1%, raises skepticism over the company's
performance in the quarters ahead. We currently have an Earnings
ESP (Read: Zacks Earnings ESP: A Better Method) of -4.8% for 2013
and -5.0% for 2014.
Other Stocks to Consider
Titan International is a well recognized manufacturer of wheel
and tires for the agricultural, earthmoving/construction and
consumer markets. The company currently has a $963 million market
Other stocks to watch out for in the industry are
) with a Zacks Rank #1 (Strong Buy) while
CNH Global NV
Alamo Group, Inc.
), carry a Zacks Rank #2 (Buy).