Company Description
Tenneco designs and makes emission control and ride control products for both OEMs and aftermarket segments of the automotive industry. Brand names include Monroe, Walker, Gillet and Clevite Elastomer.
Revenue Up 23%
On Oct 28 Tenneco announced third-quarter results that showed a 23% jump in revenue, to $1.5 billion. Adjusted net income grew exponentially, from $3 million to $24 million.
Earnings per share came out to 36 cents, a penny better that analysts were expecting. Tenneco has topped the Zacks Consensus Estimate in each of the past 8 quarters.
Estimates Looking Bullish
After the earnings release, the consensus for both 2010 and 2011 rose. While this year's projections are up 6 cents to average $1.62 and have stayed put, the 2011 estimates are still climbing.
Next year's Zacks Consensus Estimate rose a nickel on the earnings news, to $2.54, but has steadily climbed another 11 cents over the past couple months, to $2.65. Tenneco lost 59 cents per shares last year, making this quite a turnaround story.
Valuations Look Good
Shares of TEN have more than excellent growth rates; they are trading at a value too. The stock will run you about 17 times 2011 estimates. When you factor in the growth rates you get a PEG ratio of just 0.7. So, that growth is priced at a nice discount.
The Chart
You can't get a smoother ride than this. Shares have been steadily grinding their way to new highs and are now at the highest levels in over 10 years.
Bill Wilton is the Aggressive Growth Stock Strategist for Zacks.com. He is also the Editor in charge of the market-beating Zacks Small Cap Trader service
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