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Titan International (TWI) Moves 7.9% Higher: Will This Strength Last?

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Titan International shares soared 7.9% in the last trading session to close at $13.84. The move was backed by solid volume with far more shares changing hands than in a normal session. This compares to the stock's 20.2% gain over the past four weeks.

Shares of Titan International have been on an uptrend since the company reported stellar fourth-quarter 2021 results. Adjusted earnings per share of 39 cents in the quarter marked a turnaround from the loss per share of 10 cents reported in the prior-year quarter. The strong performance was driven by higher volumes, stemming from increased demand across all segments, particularly agriculture, along with pricing.

With this performance, the company ended the year on a strong note, wherein sales rose 41% year over year to $1.78 billion. Adjusted EBITDA was $135 million, nearly two and a half times that reported in 2020. Titan International posted an adjusted EPS of 85 cents in 2021 against a loss of 55 cents in the prior year.

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.

This wheel and tire supplier is expected to post quarterly earnings of $0.29 per share in its upcoming report, which represents a year-over-year change of +314.3%. Revenues are expected to be $506.33 million, up 25.5% from the year-ago quarter.

While earnings and revenue growth expectations are important in evaluating the potential strength in a stock, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.

For Titan International, the consensus EPS estimate for the quarter has been revised 42.5% higher over the last 30 days to the current level. And a positive trend in earnings estimate revision usually translates into price appreciation. So, make sure to keep an eye on TWI going forward to see if this recent jump can turn into more strength down the road.

The stock currently carries a Zacks Rank #1 (Strong Buy). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>

Titan International is a member of the Zacks Manufacturing - Farm Equipment industry. One other stock in the same industry, Agco (AGCO - Free Report) , finished the last trading session 0.9% higher at $130.83. AGCO has returned -0.5% over the past month.

For Agco, the consensus EPS estimate for the upcoming report has changed -4.8% over the past month to $1.91. This represents a change of -4.5% from what the company reported a year ago. Agco currently has a Zacks Rank of #1 (Strong Buy).


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