Construction and mining equipment maker Terex is Wednesday's IBD Stock Of The Day. TEX stock has rallied nearly 43% so far this year and is trading in a buy zone.
The construction industry has run a middling advance this year. The Machinery-Construction/Mining group is up about 24% so far in 2023. That lags the Nasdaq's 29% gain, but easily tops the S&P 500's 15% gain. Meanwhile, construction projects are heating up this summer.
Monthly construction spending rose to $19.38 billion in June, up 0.5% from the revised May estimate and increasing 3.5% from 2022 levels, the Census Bureau announced Aug. 1. Construction spending hit $917.4 billion for the first six months of the year, up from $890.4 billion for the same period last year.
U.K.-based CNH Industrial has trended lower throughout the year, whereas Dow Jones rival Caterpillar logged a 15% gain since Dec. 31. Milwaukee-based competitor Manitowoc has an 82.5% advance so far for the year.
Norwalk, Conn.-based Terex offers a variety of heavy-duty construction equipment including light towers, cranes, lifts, conveyors and crushers. The company's brands include Genie, EvoQuip and Fuchs, among others.
Terex received a host of price target upgrades in early August after blowing away Q2 forecasts on Aug. 1 and raising its outlook for the second time this year.
Earnings spiked 120% to $2.35 per share on 30% sales growth, to $1.4 billion. Analysts polled by FactSet expected earnings of $1.66 per share on $1.27 billion in revenue.
Terex lifted its earnings outlook to around $7 per share, compared to the prior guidance of $5.60 to $6 per share. The company sees net sales around $5.1 billion for the year vs. its earlier forecast of $4.8 billion to $5 billion.
KeyBanc raised its price target to 80 from 72 following results, noting that Terex's near-record backlog suggestmultiyearar growth. Wells Fargo lifted its price target to 74 from 66 and maintained an overweight rating on shares.
TEX Stock
TEX stock pared gains Wednesday after an initial 3.5% jump. The stock rebounded from its 50-day moving average earlier in the week. Shares were already trading in the buy zone for a cup-with-handle base after climbing above the 58.85 buy point on June 19. The buy zone, which extends 5% beyond a buy point, runs to 61.79.
The market's uptrend remains under pressure, cautioning investors for now against making new buys. Wednesday's sharp reversal underscores the market's uncertainty, leaving TEX stock below short-term support at its 21-day exponential moving average and its 10-day line.
Terex joined the IBD Stock Spotlight list on Tuesday.
TEX stock has a perfect 99 Composite Rating, which combines various technical indicators into one easy-to-read score. Terex has a muscular 91 EPS Rating as earnings more than doubled the past two quarters. The stock's relative strength line is off highs from March and Terex has a 94 RS Rating.
You can follow Harrison Miller for more stock news and updates on Twitter @IBD_Harrison
