The firm said it raised its rating on the global equipment manufacturer of machinery products as it has a renewed confidence in Terex's improvement initiatives, which Jefferies says makes the company's valuation "compelling."
"Terex has a new margin expansion program based on zero growth, a plan to lower its tax rate and generate cash for debt repayment," Jefferies said.STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.
The firm raised its price target on Terex Corp. stock to $35 from $30.
For the current year Jefferies forecast for earnings per share of $2.30, for the following year Jefferies estimates earnings of $3 per share.
Separately, TheStreet Ratings team rates TEREX CORP as a Buy with a ratings score of B-. TheStreet Ratings Team has this to say about their recommendation:
"We rate TEREX CORP (TEX) a BUY. This is driven by a number of strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, attractive valuation levels, good cash flow from operations, largely solid financial position with reasonable debt levels by most measures and notable return on equity. We feel these strengths outweigh the fact that the company has had sub par growth in net income."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- TEX's revenue growth has slightly outpaced the industry average of 2.4%. Since the same quarter one year prior, revenues slightly increased by 3.0%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- Net operating cash flow has significantly increased by 177.40% to $92.10 million when compared to the same quarter last year. In addition, TEREX CORP has also vastly surpassed the industry average cash flow growth rate of -21.77%.
- The debt-to-equity ratio is somewhat low, currently at 0.84, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.87 is somewhat weak and could be cause for future problems.
- TEREX CORP's earnings per share declined by 30.1% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, TEREX CORP increased its bottom line by earning $1.79 versus $0.92 in the prior year. This year, the market expects an improvement in earnings ($2.31 versus $1.79).
- You can view the full analysis from the report here: TEX Ratings Report