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Titan projections appear reasonable, says analyst

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BB&T Capital Markets likes Titan International Inc.'s 2012 outlook. As a result, it is reiterating its Buy (1) rating on the company's stock.

BB&T analyst C. Schon Williams remains "bullish" on Titan's stock for a number of reasons.

* Titan's "guidance" on its 2011 results and 2012 projections appears reasonable. (See "Titan CEO: $1.9 billion forecast conservative.")

"Management tone on agricultural demand as well as construction/mining remains very bullish with backlog at record levels. In addition, we believe there is further upside potential versus guidance if management is able to get their Bryan, Ohio, facility up to full capacity while at the same time ramping production within the newly acquired Brazilian operations."

* Goodyear Europe remains in play -- as are other potential targets. (See "Titan deal with Goodyear in Europe falls through.")

"The European farm tire assets at Goodyear are off the table for now, but we think they could be back at the table with Titan International (TWI) in the near future. In the mean time, TWI is indeed moving on to other targets, and we believe we could see an announcement in the next few months."

* More investment is needed -- and coming. At the guidance, Titan's management noted that the board approved $55 million in capex investment for next year, which could be used for acquisitions, according to Williams.

"This should serve to increase volumes at Freeport (Illinois) and Bryan, as well as get the Brazilian plant in order -- dollars well spent in our opinion."

BB&T Capital Markets is a division of Scott & Stringfellow Inc., a registered broker/dealer subsidiary of BB&T Corp.

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