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BB&T is bullish on Titan's commercial business

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BB&T Capital Markets thought highly of Titan International Inc. going into a series of investor meetings last week. Its opinion of the company has only gotten better.

Titan's stock price continues to rate a Buy(1) rating from BB&T. "We had the opportunity to host Titan management for a series of investor meetings last week and came away feeling even more confident about the story," says the company.

"Farm fundamentals remain robust and Titan is driving earnings through company specific endeavors (i.e. countries like Brazil and Europe, plus new products). Despite recent volatility in the stock, we believe our thesis is still intact and that TWI (Titan International) shares are still at an attractive entry point for investors."

Titan's stock price closed at $20.77 on Tuesday, down 14.4% from the mid-year point.

Stock    12/31/09   12/31/10   6/30/11   8/16/11

Titan      $8.11         $19.54      $24.26    $20.77

"Recent USDA (United States Department of Agriculture) outlook points to strong farm fundamentals," says BB&T. "Last week, USDA revised their demand/supply forecast for crops, with most commodities seeing upward pricing pressure as a result of weaker yields and lower global stocks. The average farm price forecast for corn in 2011/12 was raised from $5.50-$6.50 to $6.20-$7.20/bushel, indicating strong cash receipts, which is the primary driver for agricultural machinery purchases."

BB&T estimates that Titan will sell a greater-than-expected 2,500 mining tires this year at a cost of $25,000 each -- with a margin of at least 20%. "Additionally, TWI is currently signing new customer contracts for two- to three-year terms, and we believe ultimately getting to 6,000 units will not be an issue for Titan."

For a look at Titan's most recent financial results, and what BB&T had to say about them, click on "Titan is WAY up in 2Q income and sales."

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

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