) reached a new 52-week high of $37.12 on Friday, May 31, 2013.
Shares were driven to the new high primarily by expected benefits
from debt repayment, positive outlook for the Aerial Work
Platform and Cranes segments, consistent free cash flow and
This global manufacturer of a broad range of construction and
mining related capital equipment has delivered a robust one-year
return of about 127.2% and year-to-date return of about 27.61%,
outperforming the S&P 500. Average volume of shares traded
over the last three months was approximately 2.3 million shares.
Terex has delivered positive earnings surprises in two of the
last four quarters with an average surprise of 1.98%. This Zacks
Rank #3 (Hold) stock has a market cap of $3.99 billion and a
long-term expected earnings growth rate of 9.33%.
The outlook for Aerial Work Platform segment remains strong on
the back of strong replacement demand and equipment rental.
Rental fleet operators tend to replace their fleet when it
becomes too old and expensive to maintain. The equipment rental
market has been strong in recent years given the low contractor
visibility; and there is a growing shift toward renting rather
than owning. Approximately 90% of the segment's sales can be
attributed to rental companies
The Cranes segment will benefit from the imminent recovery in
U.S. construction. Terex's cash flow remains strong and the
company continues to focus and reduce its debt and improve its
overall capital structure. Furthermore, Terex has embarked on a
restructuring plan, and is planning to either close or sell
several of its businesses, which will lead to cost savings in the
Weak 1Q13 Earnings, But Improved Outlook
Terex's first-quarter 2013 adjusted earnings of 23 cents per
share declined 21% from 29 cents earned in the year-ago quarter.
However, backlog for orders to be fulfilled during the next
twelve months increased 13% sequentially and 10% over the prior
year to around $2.166 billion at first-quarter 2013 end fueled by
strong demand for Aerial Works Platform products.
Terex maintains its 2013 earnings per share forecast range of
$2.40 and $2.70 and net sales between $7.9 billion and $8.3
billion. The company expects to generate more than $500 million
in free cash flow during the year and remains committed to
reducing its debt.
The Zacks Consensus Estimate for 2013 is currently at $2.54 per
share, reflecting a 38.8% year-over-year growth and within the
On May 16, Terex announced that it has repaid $220 million of its
senior term bank debt due 2017, reflecting its continued focus on
improving its capital structure. The company added that it will
repay another $30 million of debt in July. This will result in
total debt repayment of approximately $500 million from the
middle of 2012 through the middle of 2013.
Other Stocks to Consider
Other stocks in the machinery industry that are currently
performing well and have a good visibility include
H&E Equipment Services Inc.
Alamo Group, Inc.
CNH Global NV
), all carrying Zacks Rank #2 (Buy).
ALAMO GROUP INC (ALG): Free Stock Analysis
CNH GLOBAL NV (CNH): Free Stock Analysis
H&E EQUIP SVCS (HEES): Free Stock Analysis
TEREX CORP (TEX): Free Stock Analysis Report
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