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Terex (TEX) Hits New 52-Week High: Is More Upside Left?

Terex Corporation TEX touched a fresh 52-week high of $37.90 on Jun 30, before retracing to close the day at $37.50.

Terex has a market cap of roughly $3.7 billion and the average volume of shares traded in the last three months is around 1.77M. It has a healthy year-to-date return of 19.5% and a solid one-year return of 90%.

In the last six months, Terex has outperformed the Zacks categorized Machinery-Construction/Mining industry. The company’s shares have gained around 15.4% during this period compared with the industry's growth of 12.8%.

Positive earnings estimate revisions for 2017 and 2018 and earnings growth projection of 18.43% for the next five years, indicate the stock’s potential for further price appreciation. We note that the company has beaten the Zacks Consensus Estimate in three out of the trailing four quarters, with animpressive average positive earnings surprise of 122.61%.

Terex Corporation Price and Consensus


Terex Corporation Price and Consensus | Terex Corporation Quote

Growth Catalysts

In the first-quarter conference call, Terex raised its 2017 earnings per share outlook to the range of 80–95 cents. The company expects interest savings of approximately $35 million on an annualized basis. Terex will continue to implement cost-reduction plans over the balance of 2017. Moreover, it continues to reduce its cost structure with emphasis on general and administrative expenses, which will drive growth.

Further, Terex took additional steps in the first quarter to focus on its core Aerial Work Platforms, Cranes and Material Processing businesses. A major step was closing the MHPS sale on schedule in Jan 2017. It also completed the previously announced sale of dumper and loader backhoe business based in Coventry, England.

In March, the company announced the agreement to sell its India loader backhoe business. These sales represented an important milestone as they were the last significant assets held for sale in the company’s former construction segment. The only asset remaining to sell is the Brazilian Utilities business.

Notably, Terex rolled out an assessment of its global services, parts and lifecycle solutions. The company remains focused on deploying sales management and pipeline tracking tools in its global mobile cranes business in AWP North America. Moreover, Terex’s efforts to maximize the opportunities to leverage its global spend will stoke growth.

Zacks Rank & Key Picks

Terex currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks worth considering in the same sector are Deere & Company DE, Apogee Enterprises, Inc. APOG and Colfax Corporation CFX. All three stocks flaunt a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Deere has an average positive earnings surprise of 70.41% for the trailing four quarters. Apogee delivered an average positive earnings surprise of 3.42% in the last four quarters. Colfaxhas delivered an average positive earnings surprise of 9.45% in the last four quarters.

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