Titan has been on the bullish side since August 2020. What’s the analyst sentiment that could potentially help TWI in the long-term? Let’s have a look.
Titan International (TWI) shares have pumped higher in rent months. TWI more than doubled in the last year and is up by 35% already so far in 2021. The company seems to push as the demand for agriculture products has recently spiked in the country.
The company has recovered its debts to some extent and had increased its cash balance by the end of the third quarter. So, what’s the prospect for Titan as we move into 2021.
What’s Next?
Titan International (TWI) is a global manufacturer and distributor of wheel systems for off-highway equipment that are used in agriculture, mining, construction, and other fields. The rally in TWI could be due to certain factors.
The fact that the North American harvest season has resulted in remarkable outcomes—especially the increase in corn and soybeans. Due to growth in the agriculture segment, farmers have earned more to upgrade their equipment.
The company has three major businesses from which it generates revenues. As per 2019 stats, Titan had 45% sales from agriculture, 45% from mining/earthmoving/construction, and 10% from the consumer.
The company in its Q3 2020 transcript noted that the farmers’ sentiment is high as they near a 5-year high. Moreover, there have been notable improvements in the dealer engagement—with 30% of AG dealers reporting low current inventory levels. So, the company believes that there is a good momentum that could kick-start the replacement cycle.
Furthermore, if the Biden government takes some prominent steps that could sustain the China-US trade relations, we could see farmers being more optimistic about the future—which can potentially lead to more equipment buying.
In the third quarter of 2020, the company ended the three months with a cash balance of $98.8 million, up by $18.6 million during Q3. While the net debt was lowered up to $85 million in the last 12 months, as of Q3. The company’s debt was at its lowest since Q3 2018, which is much needed—to keep the balance—in the pandemic period.
Conclusion
Titan International (TWI)is trading in the range of $7.14 – $7.65, as we write this. The company has much room for improvement in its sales. And, if the demand for its products really speeds up, we could see TWI stock popping higher—probably touching $8 per share.
