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Bull of the Day: Ternium (TX)

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When the market is red hot, it’s typically the higher beta names that benefit. Risk appetite returns and folks have no problem adding some speculative names. Naturally, I expect to see these high-fliers in high tech, cutting-edge growth industries. I don’t expect to find them in such boring old industries as steel.

Well, today’s Bull of the Day just so happens to be in the Steel – Producers industry. It’s Zacks Rank #1 (Strong Buy) Ternium (TX). Ternium S.A., through its subsidiaries, manufactures and processes various steel products in Mexico, Argentina, Paraguay, Chile, Bolivia, Uruguay, Brazil, the United States, Colombia, Guatemala, Costa Rica, Honduras, El Salvador, and Nicaragua. It operates in two segments, Steel and Mining. 

In addition to the favorable Zacks Rank, Ternium also features a Zacks Value Style Score of A, Growth of B, and Momentum of B to help it round out with a VGM Composite Score of A.

Ternium S.A. Price and Consensus

Ternium S.A. Price and Consensus
Ternium S.A. Price and Consensus

Ternium S.A. price-consensus-chart | Ternium S.A. Quote

A monster quarterly report helped analysts push up their earnings estimates for the company. Over the last thirty days, three analysts have increased their estimates for the current year and next year. The bullish moves have increased our Zacks Consensus Estimates for the current year from 57 cents to $1.65 while next year’s number is up from $1.88 to $4.33. Last quarter’s 61 cents EPS handily beat expectations calling for just 23 cents. Over the last three quarters, Ternium has at least doubled estimates. This is a big reason why analysts all over Wall Street have become so bullish on the stock.

The stock bottomed out at $9.59 on March 19th. Since then, shares have risen over 150% to the $25.49 level it trades at today. For only the third time since 2016, Ternium shares saw a Golden Cross happen, as the 50-day crossed over the 200-day. Last time, in early 2020 was a bit of a dud. However, the 2016 cross happened in April 2016 with the stock trading in the $17s. The stock topped out over $40 before the bullish run ended in late 2018.

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