Surging food prices, driven by sky-high inflation, and increased federal investments in the infrastructure space have bolstered the demand for farm and heavy machinery equipment. The month-long Russia-Ukraine war has inflated food prices even more because the U.S. has imposed several sanctions on Russian food imports. To boost the domestic agriculture industry in response to the crisis, the U.S. Department of Agriculture has invested more than $166.50 million in 108 infrastructure projects and $250 million to boost American fertilizer production.
Furthermore, last fall’s passage of a landmark $1.2 trillion bipartisan infrastructure bill is expected to drive the demand for heavy construction machinery. The global agriculture, construction, and mining machinery market is expected to grow at an 8.98% CAGR to $795.86 billion by 2025.
Given this backdrop, Wall Street analysts expect popular heavy construction machinery stocks Terex Corporation (TEX), Columbus McKinnon Corporation (CMCO), Wabash National Corporation (WNC), and Manitex International, Inc. (MNTX) to rally by more than 47% in price in the near term.
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Terex Corporation (TEX)
TEX in Westport, Conn., is a global manufacturer of aerial work platforms and materials processing machinery. It operates in two segments: Aerial Work Platforms (AWP); and Materials Processing (MP). It designs, manufactures, and markets portable aerial work platforms, utility equipment, telehandlers, material processing, and specialty equipment.
On February 01, TEX made a Series B investment in Viatec, Inc., a manufacturer of plug-and-play electronic power take-off systems. The investment should boost the company’s production and expand its market reach to electric utility customers.
Also last month, TEX increased its quarterly dividend payout by 8.3% to $0.13 per share.
For its fiscal fourth quarter, ended Dec. 31, 2021, TEX’s net sales increased 25.9% year-over-year to $990.10 million. The company’s income from operations increased 120.9% year-over-year to $69.80 million, while its net income grew 232.2% year-over-year to $58.80 million. In addition, its EPS came in at $0.83, representing a 232% increase year-over-year.
The $1.11 consensus EPS estimate for the fiscal second quarter, ending June 30, 2022, represents a 7.8% improvement year-over-year. And the $1.14 billion consensus revenue estimate for the next quarter represents a 9.8% increase from the same period last year. The company has an impressive earnings surprise history; it surpassed the consensus EPS estimates in three of the trailing four quarters.
The stock has declined 5.4% in price over the past five days to close the last trading session at $37.68. However, the 12-month median price target of $62.29 indicates a 65.3% potential upside. The price targets range from a low of $55.00 to a high of $68.00. Among seven Wall Street analysts that rated TEX, six rated it Buy while one rated it Hold.
Columbus McKinnon Corporation (CMCO)
Amherst, N.Y.-based CMCO is a global designer, manufacturer, and marketer of intelligent motion solutions, including motion control products, technologies, automated systems, and services. Its production ranges from various electric, air-powered, lever, and hand hoists, hoist trolleys, explosion-protected hoists, winches, and aluminum workstations; alloy and carbon steel chain; forged attachments; and mechanical and mechanical electromechanical actuators, and motion control systems.
On March 8, CMCO introduced the first electric chain hoist that allows wireless programming and users’ access to detailed diagnostic and analytic information directly on their smartphones/tablets. "By combining the capabilities of Intelli-Connect with the Lodestar VS, we’ve made it easier than ever to program, maintain, monitor, and troubleshoot your hoist," said Bryan Holby, senior global product manager, powered chain hoists. Also, CMCO hiked its quarterly dividend payout by 17% to $0.07 on March 21.
Last December, CMCO acquired Garvey Corporation, a leading accumulation systems solutions provider. The acquisition aligns with the company’s aim to transform itself into a high-value, intelligent motion enterprise.
CMCO’s net sales increased 29.7% year-over-year to $216.09 million in its fiscal 2022 third quarter, ended Dec. 31, 2021. Its gross margin percentage rose 150 basis points from the prior-year quarter to 34.7%.Its income from operations increased 46.6% year-over-year to $15.32 million, and its EPS grew 25.9% year-over-year to $0.34.
The $0.78 consensus EPS estimate for the fiscal fourth-quarter ending March 2022 represents a 56% improvement year-over-year. The $235.27 million consensus revenue estimate for the current quarter represents a 26.3% increase from the same period last year.
Shares of CMCO have risen marginally in price over the past month to close the last trading session at $44.63.
All three Wall Street analysts that rated CMCO rated it Buy. The $65.67, 12-month median price target indicates a 47.1% potential upside from the last closing price of $44.63. The price targets range from a low of $65.00 to a high of $66.00.
Wabash National Corporation (WNC)
WNC is a provider of engineered solutions for the transportation, logistics, and distribution industries. The Lafayette, Ind., company operates in three segments: Commercial Trailer Products; Diversified Products; and Final Mile Products. It sells its products through retail operations, independent dealers, and under six brands: Wabash, DuraPlate, DuraPlateHD, DuraPlate AeroSkirt, and AeroSkirt CX.
On March 8, WNC partnered with Clarience Technologies to launch a new technology alliance that is focused on trailer applications. The collaboration should consolidate the company’s position as an innovation leader in the transportation, logistics, and distribution industries.
Last month, WNC announced the rebranding of the company and its portfolio of brands under one powerful brand, “Wabash.” This strategic choice could boost the company’s long-term growth prospects.
WNC’s net sales increased 21.7% year-over-year to $ 1.80 billion in its fiscal 2021 (ended December 31, 2021). Its income from operations rose 139.2% from its year-ago value to $33.54 million. The company’s net income increased 101.2% year-over-year to $1.16 million, while its net income per share grew 101.1% year-to-year to $0.02.
Analysts expect WNC’s revenue to increase 22.6% year-over-year to $480.70 million in its fiscal first quarter, ending March 31, 2022. The $0.12consensus EPS estimate for the current quarter indicates a 94.5% improvement from the same period last year.
Over the past six months, the stock has gained marginally. Wall Street analysts expect WNC to hit $24.00 soon, reflecting a 57.4% potential gain from yesterday’s closing price of $15.25.
Manitex International, Inc. (MNTX)
MNTX is a leading provider of engineered lifting solutions. The Bridgeview, Ill., company markets a range of boom trucks, truck cranes, aerial platforms, and sign cranes used in industrial projects, energy exploration, and infrastructure development. It sells its products through third-party dealers and under seven brands: Manitex, PM, MAC, PM-Tadano, Oil & Steel, Badger, and Valla.
MNTX received record oil & steel aerial platform order worth $18 million from a major Italian utility company in December. This follows a $3 million order secured from the same company. These inter-continental orders should significantly boost MNTX’s revenues and profit margins, while expanding its customer base.
For its fiscal year 2021, MNTX’s net revenue increased 26.3% year-over-year to $211.54 million. The company’s gross profit increased 6.7% year-over-year to $32.94 million, while its adjusted EBITDA grew 40.4% year-over-year to $8.01 million.
Analysts expect MNTX’s revenue to increase 17% year-over-year to $247.40 million in its fiscal 2022. The $0.11 consensus EPS estimate for the current year indicates a 1,000% improvement from the same period last year.
Shares of MNTX have gained 30% in price over the past three months. MNTX is expected to hit $12.00 soon, reflecting a 57.5% potential gain from yesterday’s closing price of $7.62.
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TEX shares were trading at $37.97 per share on Thursday afternoon, up $0.29 (+0.77%). Year-to-date, TEX has declined -13.28%, versus a -5.45% rise in the benchmark S&P 500 index during the same period.
About the Author: Aditi Ganguly
Aditi is an experienced content developer and financial writer who is passionate about helping investors understand the do’s and don'ts of investing. She has a keen interest in the stock market and has a fundamental approach when analyzing equities.
4 Farm & Heavy Construction Machinery Stocks Wall Street Predicts Will Rally by More Than 47% StockNews.com
