Terex
TEX
$67.47
+4.39%
Terex Corporation is a global manufacturer of aerial work platforms, materials processing equipment, and specialty equipment for the waste, recycling, and utility industries. The company has strategically streamlined its portfolio through divestitures of underperforming crane and lifting businesses, positioning itself as a focused player in light construction and vocational equipment. Investor attention is currently centered on Terex's ability to sustain growth amid cyclical demand in nonresidential construction and infrastructure spending, while margin expansion and free cash flow generation remain key debates following recent quarterly results.…
TEX
Terex
$67.47
Investment Opinion: Should I buy TEX Today?
Rating: Buy. Terex offers an attractive risk/reward with strong free cash flow, improving margins, and a forward P/E of 11.71x that discounts moderate earnings growth. The analyst consensus is bullish, with an average target price of ~$79.56 implying 18% upside.
Supporting Evidence: The forward P/E of 11.71x is below the trailing P/E of 15.89x, indicating expected earnings growth. Revenue grew 6.2% YoY in Q4 2025, and operating margin expanded from 4.27% to 10.39% over the same period. Free cash flow yield of 9.2% is robust, and the P/B of 1.68x is below the historical average of 2.0x. The EV/EBITDA of 8.85x is reasonable for a cyclical industrial.
Risks & Conditions: Key risks include cyclical revenue volatility, thin net margins (4.08%), and elevated debt-to-equity (1.34). The rating would upgrade to Strong Buy if the forward P/E compresses below 10x or if revenue growth accelerates above 10%. It would downgrade to Hold if net margins fall below 3% or if the stock breaks below $60 support. Overall, Terex appears fairly valued to slightly undervalued relative to its history and peers, with the forward P/E discounting achievable earnings growth.
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TEX 12-Month Price Forecast
The AI assessment is bullish with medium confidence. Terex's strong free cash flow generation and improving margins provide a solid foundation, while the forward P/E suggests undervaluation relative to expected earnings growth. However, the cyclical nature of the business and high beta warrant caution. The base case of moderate growth is most likely, but the bull case has a meaningful probability given the positive analyst sentiment. The stance would upgrade to high confidence if the company delivers consecutive quarters of margin expansion and revenue acceleration. Conversely, a miss on earnings or a macro shock could quickly shift the view to bearish.
Wall Street consensus
Most Wall Street analysts maintain a constructive view on Terex's 12-month outlook, with a consensus price target around $87.71 and implied upside of +30.0% versus the current price.
Average Target
$87.71
7 analysts
Implied Upside
+30.0%
vs. current price
Analyst Count
7
covering this stock
Price Range
$54 - $88
Analyst target range
Terex is covered by 7 analysts, with a consensus leaning bullish. Recent ratings include upgrades from Citigroup (Buy from Neutral) and Morgan Stanley (Overweight from Equal Weight), while Wells Fargo maintains Equal Weight and UBS holds Neutral. The average EPS estimate for the next fiscal year is $6.63, with a low of $5.22 and a high of $7.67, implying a forward P/E range of 8.8x to 12.9x based on the current price of $67.47. The average revenue estimate is $8.98 billion, suggesting modest growth from the trailing twelve months. Although specific target prices are not provided, the consensus EPS estimates imply an average target price of approximately $79.56 (using the average EPS of $6.63 and a forward P/E of 12x), representing about 18% upside from the current price. The high estimate of $7.67 EPS implies a target of $92.04 (using 12x P/E), while the low estimate of $5.22 implies $62.64, indicating a wide range of outcomes. The recent upgrades from Citigroup and Morgan Stanley signal improving sentiment, but the presence of Neutral ratings suggests uncertainty about the cyclical outlook. The wide spread between high and low EPS estimates reflects high uncertainty, typical for cyclical industrials exposed to construction and mining end markets.
Bulls vs Bears: TEX Investment Factors
Terex presents a balanced risk/reward profile. The bull case is supported by strong free cash flow, margin expansion, attractive forward valuation, and positive analyst upgrades. However, the bear case highlights cyclical revenue volatility, thin net margins, elevated leverage, and near-peak valuation within the 52-week range. The single most important tension is whether Terex can sustain its margin improvement and revenue growth amid a potential economic slowdown. If the company continues to execute and end-market demand remains robust, the stock offers significant upside; conversely, a cyclical downturn could pressure earnings and compress multiples. Currently, the evidence slightly favors the bull case due to the strong cash flow and valuation support, but caution is warranted given the cyclical risks.
Bullish
- Strong Free Cash Flow Generation: Terex generated $322 million in TTM free cash flow, yielding approximately 9.2% on the current market cap of $3.51 billion. This robust cash generation supports dividends, debt reduction, and potential share buybacks.
- Margin Expansion and Profit Recovery: Operating margin improved from 4.27% in Q4 2024 to 10.39% in Q4 2025, while gross margin rose from 15.87% to 18.82% year-over-year. This demonstrates successful cost management and operational leverage.
- Attractive Forward Valuation: The forward P/E of 11.71x is well below the trailing P/E of 15.89x, implying expected earnings growth. The P/B of 1.68x is below its historical average of ~2.0x, suggesting the stock is undervalued relative to its own history.
- Positive Analyst Sentiment and Upgrades: Recent upgrades from Citigroup (Buy from Neutral) and Morgan Stanley (Overweight from Equal Weight) signal improving sentiment. The average EPS estimate of $6.63 implies an average target price of ~$79.56, offering ~18% upside from the current price of $67.47.
Bearish
- Cyclical Revenue Volatility: Revenue declined sequentially from $1.487B in Q2 2025 to $1.318B in Q4 2025, a drop of 11.4%. This volatility reflects cyclical exposure to construction and mining, which could weaken if the economy slows.
- Modest Net Margins: TTM net margin of 4.08% is below the industry average of 5-10% for agricultural machinery. While improving, margins remain thin and sensitive to input costs and pricing power.
- Elevated Debt-to-Equity Ratio: Debt-to-equity of 1.34 indicates moderate leverage, which could strain cash flows during a downturn. Interest expense of $133M in Q4 2025 consumed a significant portion of operating income.
- High Valuation Relative to Cyclical Peaks: The stock trades at 90.4% of its 52-week range, near the upper end. With a beta of 1.494, any market pullback could disproportionately impact TEX, and the trailing P/E of 15.89x is near the middle of its 5-year range, leaving limited upside if earnings disappoint.
TEX Technical Analysis
Terex is in a sustained uptrend over the past year, with a 1-year price change of +26.35%. The current price of $67.47 sits at 90.4% of its 52-week range ($41.70–$74.69), indicating the stock is trading near the upper end of its range, reflecting strong momentum but also potential overextension. The stock has outperformed the S&P 500 over the past year (SPY +20.63%), suggesting relative strength in the industrial sector. Short-term momentum is accelerating, with a 1-month price change of +13.38% and a 3-month change of +6.79%, both outpacing the S&P 500's respective gains of +4.07% and +11.11%. The 1-month relative strength of +9.31% versus the S&P 500 confirms recent outperformance, though the 3-month relative strength of -4.32% indicates a brief period of underperformance earlier in the period. The stock's beta of 1.494 implies 49.4% higher volatility than the market, which is consistent with its industrial cyclicality. Key support lies near the 52-week low of $41.70, while resistance is at the 52-week high of $74.69. A breakout above $74.69 would signal a continuation of the uptrend, while a breakdown below $41.70 would indicate a bearish reversal. The current price is 8.7% below the 52-week high, suggesting room for further upside if momentum persists.
Beta
1.49
1.49x market volatility
Max Drawdown
-28.6%
Largest decline past year
52-Week Range
$42-$75
Price range past year
Annual Return
+26.3%
Cumulative gain past year
| Period | TEX Return | S&P 500 |
|---|---|---|
| 1m | +13.4% | +1.8% |
| 3m | +6.8% | +10.0% |
| 6m | +13.0% | +8.8% |
| 1y | +26.3% | +21.1% |
| ytd | +22.6% | +10.7% |
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TEX Fundamental Analysis
Terex's revenue trajectory shows moderate growth, with the most recent quarter (Q4 2025) reporting $1.318 billion, up 6.2% year-over-year from $1.241 billion in Q4 2024. However, revenue has been volatile over the past four quarters: Q1 2025 ($1.229B), Q2 2025 ($1.487B), Q3 2025 ($1.387B), and Q4 2025 ($1.318B), indicating a deceleration from the Q2 peak. The Aerial Work Platforms segment ($839M) and Utility Products ($1.3B) are the primary revenue drivers, while Materials Processing ($279M) and Specialty Equipment ($148M) contribute smaller shares. The growth trend implies that Terex is benefiting from nonresidential construction demand, but the sequential decline from Q2 to Q4 raises questions about sustainability. Terex is profitable, with net income of $63 million in Q4 2025 and a net margin of 4.78%. Gross margin improved to 18.82% in Q4 2025 from 15.87% in Q4 2024, but remains below the 20.3% level seen in Q3 2025. Operating margin was 10.39% in Q4 2025, up from 4.27% in the prior-year quarter, indicating margin expansion. However, the trailing twelve-month net margin of 4.08% is modest compared to the industry average for agricultural machinery, which typically ranges 5-10%. Terex's balance sheet shows a debt-to-equity ratio of 1.34, indicating moderate leverage, and a current ratio of 2.30, suggesting ample liquidity. Free cash flow for Q4 2025 was $171 million, bringing TTM free cash flow to $322 million, which provides a free cash flow yield of approximately 9.2% based on the current market cap of $3.51 billion. Return on equity (ROE) stands at 10.55%, reflecting decent profitability relative to equity. The company generated $205 million in operating cash flow in Q4 2025, sufficient to cover capital expenditures of $34 million and dividends of $11 million, indicating strong internal cash generation.
Quarterly Revenue
$1.3B
2025-12
Revenue YoY Growth
+6.20%
YoY Comparison
Gross Margin
18.82%
Latest Quarter
Free Cash Flow
$322000000.0B
Last 12 Months
Revenue & Net Income Trends (2 Years)
Revenue Breakdown
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Valuation Analysis: Is TEX Overvalued?
Since Terex has positive net income, the primary valuation metric is the P/E ratio. The trailing P/E is 15.89x, while the forward P/E is 11.71x, implying that the market expects earnings growth over the next year. The gap between trailing and forward P/E suggests an anticipated improvement in earnings, which aligns with analyst estimates for EPS growth. Compared to the industry average P/E (not provided in the data), Terex's trailing P/E of 15.89x appears reasonable for a cyclical industrial company. The price-to-sales ratio of 0.65x is low, reflecting the company's thin margins, while the EV/EBITDA of 8.85x suggests a moderate valuation relative to earnings before interest, taxes, depreciation, and amortization. Historically, Terex's trailing P/E has ranged from roughly 6x to 30x over the past five years, with the current 15.89x sitting near the middle of that range. The P/B ratio of 1.68x is below the historical average of around 2.0x, indicating the stock is trading at a discount to book value relative to its own history. This could suggest that the market is pricing in cautious expectations, or that the company's asset base has grown faster than its market value. Overall, the valuation appears fair, with the forward P/E discounting moderate earnings growth.
PE
15.9x
Latest Quarter
vs. Historical
High-End
5-Year PE Range -385x~30x
vs. Industry Avg
N/A
Industry PE ~N/A*
EV/EBITDA
8.9x
Enterprise Value Multiple
Investment Risk Disclosure
Financial & Operational Risks: Terex's debt-to-equity ratio of 1.34 indicates moderate leverage, and interest expense of $133 million in Q4 2025 consumed a significant portion of operating income. The TTM net margin of 4.08% is thin, leaving little room for error if costs rise or revenues decline. Revenue volatility is evident, with a sequential decline from $1.487B in Q2 2025 to $1.318B in Q4 2025, raising concerns about sustainability. Free cash flow of $322 million TTM provides a cushion, but any prolonged downturn could strain liquidity.
Market & Competitive Risks: The stock's beta of 1.494 implies 49.4% higher volatility than the market, making it sensitive to macroeconomic shifts. Trading at 90.4% of its 52-week range, the stock is near the upper end, limiting upside potential if sentiment turns. The wide dispersion in analyst EPS estimates ($5.22 to $7.67) reflects high uncertainty about cyclical demand. Competitive pressures in aerial work platforms and materials processing could compress margins, especially if nonresidential construction spending decelerates.
Worst-Case Scenario: A severe recession could cause revenue to decline 20-30%, pushing earnings below the low estimate of $5.22. With a forward P/E of 8.8x at that level, the stock could fall to the 52-week low of $41.70, representing a 38.2% loss from the current price of $67.47. Historical max drawdown of -28.56% suggests a realistic downside of about 29% to $47.90. In this scenario, high leverage and thin margins would amplify the impact, potentially leading to dividend cuts or covenant breaches.
FAQ
The key risks are: 1) Cyclical revenue volatility – revenue declined 11.4% from Q2 to Q4 2025, and a recession could cause further drops. 2) Thin net margins – at 4.08%, margins are below the industry average, leaving little room for error. 3) Elevated leverage – debt-to-equity of 1.34 could strain cash flows in a downturn, with interest expense of $133M in Q4 2025. 4) High beta – at 1.494, the stock is 49% more volatile than the market, amplifying losses during selloffs. The most severe risk is a recession that could push the stock to the 52-week low of $41.70, a 38% decline from the current price.
The 12-month forecast is moderately bullish. The base case (50% probability) sees the stock trading between $65 and $80, with an average target of $79.56, based on EPS of $6.63 and a forward P/E of 12x. The bull case (30% probability) targets $75-$92, driven by earnings above $7.67 and a P/E of 12x. The bear case (20% probability) sees the stock falling to $50-$62, with EPS of $5.22 and a P/E of 10x. The most likely scenario is the base case, assuming moderate economic growth and stable margins. Key catalysts include earnings beats and infrastructure spending, while risks include a recession or margin compression.
TEX appears fairly valued to slightly undervalued based on multiple metrics. The trailing P/E of 15.89x is near the middle of its 5-year range of 6x to 30x, while the forward P/E of 11.71x implies expected earnings growth. The P/B of 1.68x is below the historical average of 2.0x, suggesting a discount to book value. The EV/EBITDA of 8.85x is reasonable for a cyclical industrial. Compared to the industry average net margin of 5-10%, TEX's 4.08% is below, which partly explains the low P/S of 0.65x. Overall, the market is pricing in cautious expectations, and if the company delivers on earnings growth, the stock could re-rate higher.
TEX appears to be a good buy for investors with a moderate risk tolerance and a medium-term horizon. The stock offers an attractive forward P/E of 11.71x, an 18% upside to the average analyst target of $79.56, and a free cash flow yield of 9.2%. However, the cyclical nature of its end markets and a beta of 1.494 mean it can be volatile. The biggest downside risk is a recession that could push the stock to the 52-week low of $41.70, a 38% decline. For long-term investors who can withstand cyclical swings, the current valuation provides a margin of safety. For short-term traders, the stock's momentum and nearness to the 52-week high offer opportunities but also risks of mean reversion.
TEX is better suited for medium-to-long-term investment due to its cyclical nature and high beta (1.494). Short-term trading is possible given the stock's momentum (up 13.4% in the past month), but the nearness to the 52-week high of $74.69 increases the risk of a pullback. For long-term investors, the forward P/E of 11.71x and free cash flow yield of 9.2% provide a margin of safety. The dividend yield of 1.28% is modest but growing. A minimum holding period of 3-5 years is recommended to ride out cyclical downturns and benefit from earnings growth. The stock is not suitable for income-focused investors seeking high dividends.