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Here's Why Investors Should Retain Terex (TEX) Stock Now

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Terex Corporation (TEX - Free Report) is well-poised for growth on the back of robust customer demand and backlog levels in both its segments. Focus on cost-control actions, strategic growth initiatives, investment in innovative products and digital growth bodes well.

TEX currently has a Zacks Rank #3 (Hold) and a VGM Score of A. Our research shows that stocks with a VGM Score of A or B combined with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 offer the best investment opportunities. You can see the complete list of today’s Zacks #1 Rank stocks here.

Let's delve deeper into the factors that make Terex worth holding on to at the moment.

Price Performance

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The stock has gained 11% in the past three months compared with the industry’s growth of 1.6%.

Positive Earnings Surprise Trend

Terex has a trailing four-quarter earnings surprise of 31.7%, on average.

Upbeat Outlook

Terex expects earnings in the range of $3.80-$4.20 in 2022, indicating 30% growth at the midpoint from the year-ago reported figure. Growth will be driven by strong demand, TEX’s efforts to overcome supply disruptions and a ramp-up in production. Price hikes and cost reductions will help offset inflationary pressures and aid earnings.

Northward Growth Projections

The Zacks Consensus Estimate for TEX’s earnings per share is currently pegged at $4.01 for 2022, indicating a 30.6% improvement from the prior-year reported figure. The same for 2023 stands at $4.67, projecting an improvement of 16.5% from the year-ago reported number. TEX has an estimated long-term earnings growth rate of 17.3%.

Solid Momentum in Segments

Terex’s Aerial Work Platforms segment is witnessing continued solid global demand. It will gain from its efforts to right-size its cost structure, focus on operational execution, a strengthening global footprint and innovative product offerings. In the Material Processing segment, robust end-market demand will drive revenues. A solid product pipeline, expansion into newer geographies, rollout of innovative products and a continued strong execution are positives.

Terex’s backlog in both its segments improved over the last seven quarters owing to solid demand. TEX ended the recently-reported second-quarter 2022, with a solid total backlog of $3.47 billion, up 51% from last year’s levels. This bodes well for its top-line performance in the forthcoming quarters. Higher spending on infrastructure in the United States is expected to be a major catalyst for TEX going forward.

Other Key Drivers

Terex made significant progress in its “Execute, Innovate, Grow” strategy. Per the “Execute” theme, TEX continues the advancement made with its “Execute to Win” theme by intensifying process discipline and implementing several new operational processes, among other initiatives. Working on this theme, TEX managed to lower its SG&A expense to 11% of its sales.

The “Innovate” factor emphasizes on continuously developing its product offerings and applying technology. In sync with this objective, Terex recently launched the first-of-its-kind all-electric utility truck. The “Grow” aspect focuses on increasing its inorganic investment and acquisitions, the most recent being the transactions of Steelweld and ProAll.

Additionally, Terex is focused on maintaining strong liquidity. At the end of the second quarter of 2022, TEX had $678.3 million of total available liquidity, with no near-term maturities. Its total debt-to-total capital ratio has gone down over the past few years and came in at 0.44 as of Jun 30, 2022, lower than the industry’s 0.70.

Stocks to Consider

Some better-ranked stocks in the Industrial Products sector are  Tenaris (TS - Free Report) , CECO Environmental and W.W. Grainger Inc. (GWW - Free Report) . While TS flaunts a Zacks Rank #1, CECE and GWW carry a Zacks Rank #2 at present.

Tenaris delivered a trailing four-quarter earnings surprise of 34%, on average. Earnings estimates have increased 8% for fiscal 2022 in the past 60 days. TS’ shares have risen 11% in the past three months.

CECO Environmental delivered a trailing four-quarter earnings surprise of 29.1%, on average. Earnings estimates have increased 17% for fiscal 2022 in the past 60 days. The CECE stock has gained 61% in the past three months.

Grainger’s earnings surprise in the last four quarters was 7.9%, on average. In the past 60 days, GWW’s earnings estimates have increased 4% for 2022. The stock has gained 6% in the past three months.


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