Terex Corporation (TEX) Hits Fresh High: Is There Still Room to Run?
Have you been paying attention to shares of Terex (TEX)? Shares have been on the move with the stock up 16% over the past month. The stock hit a new 52-week high of $60.01 in the previous session. Terex has gained 40.4% since the start of the year compared to the 5.9% move for the Zacks Industrial Products sector and the 5.5% return for the Zacks Manufacturing - Construction and Mining industry.
What's Driving the Outperformance?
The stock has an impressive record of positive earnings surprises, as it hasn't missed our earnings consensus estimate in any of the last four quarters. In its last earnings report on February 9, 2023, Terex reported EPS of $1.34 versus consensus estimate of $1.13.
For the current fiscal year, Terex is expected to post earnings of $4.89 per share on $4.75 billion in revenues. This represents a 13.19% change in EPS on a 7.42% change in revenues. For the next fiscal year, the company is expected to earn $5.14 per share on $4.79 billion in revenues. This represents a year-over-year change of 5.23% and 0.93%, respectively.
Valuation Metrics
Terex may be at a 52-week high right now, but what might the future hold for the stock? A key aspect of this question is taking a look at valuation metrics in order to determine if the company is due for a pullback from this level.
On this front, we can look at the Zacks Style Scores, as they provide investors with an additional way to sort through stocks (beyond looking at the Zacks Rank of a security). These styles are represented by grades running from A to F in the categories of Value, Growth, and Momentum, while there is a combined VGM Score as well. Investors should consider the style scores a valuable tool that can help you to pick the most appropriate Zacks Rank stocks based on their individual investment style.
Terex has a Value Score of A. The stock's Growth and Momentum Scores are B and B, respectively, giving the company a VGM Score of A.
In terms of its value breakdown, the stock currently trades at 12.3X current fiscal year EPS estimates, which is not in-line with the peer industry average of 14.8X. On a trailing cash flow basis, the stock currently trades at 11.7X versus its peer group's average of 7X. Additionally, the stock has a PEG ratio of 0.65. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.
Zacks Rank
We also need to consider the stock's Zacks Rank, as this supersedes any trend on the style score front. Fortunately, Terex currently has a Zacks Rank of #2 (Buy) thanks to favorable earnings estimate revisions from covering analysts.
Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, it looks as if Terex passes the test. Thus, it seems as though Terex shares could have potential in the weeks and months to come.
How Does TEX Stack Up to the Competition?
Shares of TEX have been soaring, and the company still appears to be a decent choice, but what about the rest of the industry? One industry peer that looks good is The Manitowoc Company, Inc. (MTW). MTW has a Zacks Rank of # 1 (Strong Buy) and a Value Score of C, a Growth Score of A, and a Momentum Score of D.
Earnings were strong last quarter. The Manitowoc Company, Inc. beat our consensus estimate by 221.74%, and for the current fiscal year, MTW is expected to post earnings of $0.79 per share on revenue of $2.07 billion.
Shares of The Manitowoc Company, Inc. have gained 35.4% over the past month, and currently trade at a forward P/E of 24.32X and a P/CF of 6.59X.
The Manufacturing - Construction and Mining industry is in the top 6% of all the industries we have in our universe, so it looks like there are some nice tailwinds for TEX and MTW, even beyond their own solid fundamental situation.
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Terex Corporation (TEX) : Free Stock Analysis Report
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