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Titan International (TWI) Inks 3-Year Deal With CNH Industrial

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Titan International, Inc. TWI announced that it entered a three-year supply agreement with CNH Industrial N.V. CNHI. Per the deal, TWI will supply farm wheels and tires manufactured at its plants across North America, South America and Europe to various CNH Industrial manufacturing locations.

The deal, which further strengthens its long-standing relationship with CNH, is valued at around $400 million based on current exchange rates and raw material pricing levels. TWI’s shares have gained 2% on the news.

The company’s shares have been on the rise, yielding a 29% gain since it reported solid fourth-quarter 2021 results on Mar 2. Titan International delivered adjusted earnings per share of 39 cents that beat the Zacks Consensus Estimate of 18 cents by a solid margin of 117%. The bottom-line figure also marked a turnaround from a loss per share of 10 cents reported in the prior-year quarter. Revenues increased 49% year over year to $488 million in the quarter, surpassing the Zacks Consensus Estimate of $442 million.

The stellar performance was driven by higher volumes, stemming from increased demand across all segments, particularly agriculture. Pricing actions undertaken to offset rising raw material costs and other inflationary impacts in the markets, including freight, contributed to earnings.

The Agricultural segment has been benefiting from strong demand across all geographic markets, as well as pricing actions. Improvements in global economic conditions and recovery in the construction markets have been driving the Earthmoving/Construction segment’s performance. Meanwhile, the Consumer segment has been witnessing higher volumes related to general market improvements.

Backed by the momentum, Titan International expects to deliver revenues of more than $2 billion in 2022. The company expects an adjusted EBITDA of $175 million for the year.

Rising agricultural commodity prices and the consequent improvement in farmer income, as well as the need to replace old equipment, will continue to support the Agricultural segment’s performance. The company will gain from the ramp-up of infrastructure spending in the United States.

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Zacks Investment Research


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Over the past six months, Titan International’s shares have surged 101% compared with its industry’s rally of 21.2% in the same time frame.

Zacks Rank & Other Stocks to Consider

Titan International currently sports a Rank #1 (Strong Buy) stock. You can see the complete list of today’s Zacks #1 Rank stocks here.

Some other top-ranked stocks in the Industrial Products sector are Applied Industrial Technologies, Inc. AIT and AGCO Corporation AGCO, each carrying a Zacks Rank #2 (Buy) at present.

Applied Industrial Technologies reported an adjusted EPS of $1.46 in second-quarter fiscal 2022 (ended Dec 31, 2021), up 49% year over year and beating the Zacks Consensus Estimate of $1.09. AIT has a trailing four-quarter earnings surprise of 27.9%, on average.

Applied Industrial Technologies has an expected earnings growth rate of 24.3% for fiscal 2022. The Zacks Consensus Estimate for fiscal-year earnings has moved up 8.8% in the past 60 days. AIT’s shares have gained 8.6% in the past six months.

AGCO Corp's fourth-quarter 2021 adjusted EPS increased 100% year over year to $3.08, beating the Zacks Consensus Estimate of $1.72. AGCO has a trailing four-quarter earnings surprise of 56.6%, on average. In the past six months, the company’s shares have gained 12.2%.

AGCO Corp has an estimated earnings growth rate of 12.1% for 2022. In the past 60 days, the Zacks Consensus Estimate for current-year earnings has been revised upward by 10.8%.


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