Terex
TEX
$56.94
-1.08%
Terex Corporation is a global manufacturer of aerial work platforms, materials processing equipment, and specialty equipment serving the waste, recycling, and utility industries, operating within the Industrial Machinery segment of the broader Industrials sector. The company has been deliberately reshaped through decades of acquisitions and divestitures—most notably exiting much of its crane and lifting businesses—into a more focused portfolio where aerial work platforms represent roughly 40% of sales, materials processing about 30%, and the environmental solutions group the remaining 30%, giving it a distinct position as a lean, vocational-equipment specialist rather than a broad-line construction OEM. The current investor narrative is dominated by a dramatic and somewhat puzzling divergence: reported Q3 2026 revenue of $2.197 billion represents 58.4% year-over-year growth, yet the stock has fallen roughly 19% over the past three months and sits near the lower third of its 52-week range, suggesting the market is skeptical about the durability or quality of that growth. Complicating the picture, Q1 2026 posted a $89 million net loss and negative EBITDA of $2 million before a sharp Q2/Q3 recovery, and the share count jumped from roughly 66 million to 113 million shares outstanding—pointing to a large equity issuance or acquisition-related dilution that investors are still digesting. Analyst commentary remains constructive, with Truist, Morgan Stanley, Citigroup, and Barclays all maintaining Buy/Overweight/Outperform ratings through late October 2026, framing Terex as a beneficiary of construction and infrastructure volume trends alongside larger peers like Caterpillar.…
TEX
Terex
$56.94
Related headlines
Investment Opinion: Should I buy TEX Today?
Rating: Hold with a constructive bias. The thesis is that Terex is a cheap, cash-generative, analyst-favored industrial whose 58.4% revenue growth and Q2/Q3 margin recovery are real but acquisition-inflated, so the market is correctly demanding proof of organic growth and deleveraging before re-rating the stock from 0.65x PS and 8.85x EV/EBITDA toward peer multiples. With 6 of 10 analysts Buy/Outperform, zero downgrades after the October 29 Q3 print, and a consensus forward EPS of $6.86 implying roughly 8.0x forward earnings at $54.96, the risk/reward skews positive but lacks a near-term catalyst to force the re-rating.
Supporting evidence: (1) valuation is at a multi-year low—PS of 0.65x versus a 2.4–3.7x range in 2022–2025, EV/EBITDA of 8.85x versus a 12–14x peer band, and P/B of 1.68x near the bottom of its 1.2–2.8x history; (2) revenue grew 58.4% YoY to $2.197 billion in Q3 2026 and has held above $1.7 billion for three straight quarters; (3) profitability recovered from a -$89 million Q1 net loss to $110 million and $114 million in Q2/Q3, with operating margins of 8.36% and 8.33%; (4) TTM free cash flow of $419 million against a $3.51 billion market cap is an ~11.9% FCF yield, backed by a 2.30x current ratio and $241 million of Q3 operating cash flow; and (5) the consensus forward EPS of $6.86 versus the $5.86 low estimate implies fair value of roughly $82–$96 at a 12–14x multiple, well above the current price, though that is inferred rather than a reported target.
Risks and conditions: the three thesis-breakers are (a) leverage—debt-to-equity of 1.34x versus ~0.44–0.52x previously, with $49 million quarterly interest expense and only 3.73x interest coverage; (b) dilution—shares outstanding jumped from ~66 million to 113.3 million, a 71% increase tied to $467 million of Q1 acquisitions; and (c) margin quality—19.4% trailing gross margin and 4.08% net margin versus 22–24% gross margins in 2023–2024. This Hold would upgrade to Buy if Q4 confirms operating margins above 8% with sequential deleveraging and any disclosure of organic growth above 10%, or if the stock retests the $49.68 October low without a fundamental break; it would downgrade to Sell if gross margin falls back below 18% or if a Q4 miss triggers the first analyst downgrade. Verdict: undervalued relative to its own history and peers on revenue and cash-flow metrics, but fairly valued to slightly cheap on earnings until organic growth and leverage are clarified.
Sign up to view all
TEX 12-Month Price Forecast
Terex presents a classic cheap-for-a-reason setup: the stock trades at 0.65x PS and 8.85x EV/EBITDA, roughly 30–40% below peer multiples, while revenue is up 58.4% and free cash flow yields ~11.9%. The discount is explained by the 71% share count increase, debt-to-equity of 1.34x, and gross margin of 19.4% versus 22–24% in 2023–2024, which together make the growth look lower-quality than the headline. Analyst sentiment is constructive—6 of 10 Buy-rated, no downgrades after Q3—but the absence of fresh upgrades and the 36% spread in EPS estimates ($5.86–$7.98) signal that conviction on magnitude is weak. The base case (50% probability) is a $58–$72 range-bound year as the market waits for organic growth disclosure and deleveraging; the bull case (25%) requires margins to hold above 8% and the multiple to re-rate toward $82–$96. I would upgrade to bullish on a Q4 print showing gross margin above 20% with debt-to-equity below 1.0x, and downgrade to bearish if gross margin falls below 18% or the first downgrade lands.
Wall Street consensus
Coverage is solid with 10 analysts, and the sentiment is decidedly bullish. The institutional ratings log shows Truist (Buy), Morgan Stanley (Overweight), Wells Fargo (Equal Weight), Citigroup (Buy), JP Morgan (Neutral), Evercore ISI (Outperform), and Barclays (Overweight) all reaffirming their ratings between July and October 2026—notably, there are zero downgrades in the visible record, and the reaffirmations came after the Q3 print on October 29. The distribution skews roughly 6 Buy/Outperform, 2 Hold/Neutral, and 0 Sell, a constructive consensus. The consensus EPS estimate of $6.86 (range $5.86–$7.98) and revenue estimate of $9.215 billion (range $8.85–$9.57 billion) imply analysts expect a strong forward year; however, the data does not provide an explicit average price target, so a precise upside calculation cannot be made—based on the forward EPS estimate and a peer-appropriate 12–14x multiple, fair value would be in the $82–$96 range, well above the current $54.96, but that is an inferred rather than reported target.
The target range and rating pattern signal high conviction on direction but meaningful uncertainty on magnitude. The high EPS estimate of $7.98 versus the low of $5.86 is a 36% spread, which is wide for a company of this size and reflects genuine disagreement about acquisition integration, margin recovery, and end-market demand. The bulls (Truist, Morgan Stanley, Citigroup, Barclays, Evercore) are effectively betting that the Q2/Q3 margin recovery is durable, that the utility/environmental segment sustains its $1.3 billion quarterly run-rate, and that deleveraging follows; the neutral camp (JP Morgan, Wells Fargo) likely questions the 1.34x debt-to-equity, the dilution from 66 million to 113 million shares, and whether 58% revenue growth is repeatable. The absence of any downgrades despite a 19% three-month decline suggests analysts view the selloff as a valuation reset rather than a thesis break—a mildly positive signal, though the lack of fresh upgrades means the stock may need a catalyst (Q4 results, deleveraging progress, or organic growth disclosure) to close the gap to fair value.
Bulls vs Bears: TEX Investment Factors
The bear case currently has slightly stronger near-term evidence: the 71% share count increase, debt-to-equity at 1.34x, and compressed 19.4% gross margins mean the 58.4% revenue growth is lower-quality than the headline implies, and the market's 19% three-month selloff reflects that skepticism. The bull case rests on valuation—0.65x PS and 8.85x EV/EBITDA are at multi-year lows against peers at 12–14x—and on the Q2/Q3 margin recovery proving durable. Analyst sentiment (6 Buy, 2 Hold, 0 Sell, no downgrades) leans constructive but lacks fresh upgrades, suggesting the stock needs a catalyst. The single most important tension is whether the Q2/Q3 margin recovery and utility-segment run-rate are sustainable and organically driven; if Q4 confirms durable ~8%+ operating margins and deleveraging, the valuation discount should close, but if margins roll over or organic growth stalls, the cheap multiple is a value trap.
Bullish
- Revenue up 58.4% YoY: Q3 2026 revenue of $2.197 billion grew 58.4% from $1.387 billion in Q3 2025, and the quarterly run-rate has held above $1.7 billion for three straight quarters versus roughly $1.2–1.5 billion a year earlier. Even accounting for acquisition inflation, the business is operating at a structurally larger scale.
- Deep valuation discount to peers: At $54.96 the stock trades at 0.65x PS, 8.85x EV/EBITDA, and 1.68x book versus diversified machinery peers that historically command 12–14x EV/EBITDA and 1.5–2.5x PS. The PS ratio is a multi-year low against a 2.4–3.7x range in 2022–2025.
- Margin recovery from Q1 trough: Q1 2026 posted a -$89 million net loss and -4.73% operating margin, but Q2 and Q3 recovered to $110 million and $114 million of net income with operating margins of 8.36% and 8.33%. The Q1 weakness looks transient (integration and seasonality) rather than structural.
- Zero downgrades, 6 of 10 Buy-rated: Truist, Morgan Stanley, Citigroup, Barclays, and Evercore all reaffirmed Buy/Outperform ratings after the October 29 Q3 print, with no downgrades in the visible record. Consensus forward EPS of $6.86 implies roughly 8.0x forward earnings at the current price.
Bearish
- Massive dilution from 66M to 113M shares: Shares outstanding jumped from roughly 66 million to 113.3 million—a 71% increase—tied to the $467 million of Q1 2026 acquisitions. Per-share value creation is far less impressive than the headline 58.4% revenue growth suggests, and investors are still digesting the dilution.
- Leverage more than doubled: Debt-to-equity has risen to 1.34x from roughly 0.44–0.52x in prior periods, with total debt to capitalization at 34.2%. Quarterly interest expense of $49 million against interest coverage of 3.73x leaves limited headroom if rates stay elevated or EBITDA disappoints.
- Margins structurally compressed: Trailing gross margin of 19.4% and operating margin of 8.76% sit below the 22–24% gross margins posted in 2023–2024, reflecting mix shift toward lower-margin utility products and acquisition dilution. Net margin of just 4.08% leaves little cushion for a cyclical downturn.
- Organic growth unproven: The 58.4% growth is almost certainly acquisition-inflated, and the data does not isolate organic growth. Consensus forward revenue of $9.215 billion implies a sharp deceleration from the current run-rate, and the wide $5.86–$7.98 EPS estimate range (36% spread) reflects genuine disagreement on integration and demand.
TEX Technical Analysis
Terex is in a medium-term downtrend that has partially reversed into a fragile recovery. The stock is up 18.86% over the trailing year but down 18.85% over three months and down 13.58% over six months, with a year-to-date change of just -0.13%—essentially flat after a round trip. The current price of $54.96 sits roughly 33% below the 52-week high of approximately $74.58 (set June 25, 2026) and about 10.4% above the 52-week low of roughly $49.68 (October 27, 2026), placing it at only about 40% of its 52-week range. That positioning is neither a momentum breakout nor a clean falling-knife setup—it is a stock that has already absorbed significant selling and is attempting to base, but remains well below the levels where it spent the summer. The maximum drawdown of -33.39% confirms a full correction occurred within the period, and the fact that price is holding above the October low while the 1-year return remains positive argues for a bottoming process rather than a structural breakdown.
Short-term momentum has turned constructive and is diverging sharply from the intermediate trend. The 1-month change is +1.53% versus a 3-month change of -18.85%, a roughly 20-point swing that signals deceleration of the downtrend and the early stages of mean reversion. Critically, this is happening against a weak tape: SPY is down 4.99% over one month and 4.91% over three months, giving Terex a relative strength of +6.52% over one month even as its 3-month relative strength is -13.94% and 6-month is -13.04%. The recent price action supports the reversal read—the stock bottomed at $49.68 on October 27, then rallied to $56.55 on October 29 and $57.68 on November 2 before pulling back to $54.96, a sequence of higher lows off the low. Volume of roughly 1.29 million shares on the latest session is modest and does not yet confirm institutional accumulation, so the bounce lacks the volume signature of a high-conviction turn.
Key technical levels are well defined. Support sits at the $49.68 October low, with a secondary shelf around $50.67–$51.04 where the stock consolidated for several sessions; a breakdown below $49.68 would confirm the downtrend and likely target the low-to-mid $40s, while resistance is the $74.58 June high, with intermediate supply at $68–$70 where the stock repeatedly failed in July and August. A breakout above $70 would signal a full trend reversal and re-rating, whereas a failure at $57–$60 (the recent bounce highs) would mark the rally as a dead-cat bounce. Volatility is elevated: the -33.39% max drawdown and the 25% single-day range between the October 27 low and October 29 high imply realized volatility well above the market, and while beta is not provided, the stock's 3-month relative strength of -13.94% against SPY indicates high sensitivity to cyclical and industrial sentiment—position sizing should account for drawdowns of this magnitude.
Beta
—
—
Max Drawdown
-33.4%
Largest decline past year
52-Week Range
—
Price range past year
Annual Return
+24.7%
Cumulative gain past year
| Period | TEX Return | S&P 500 |
|---|---|---|
| 1m | +9.1% | -2.0% |
| 3m | -16.2% | -2.8% |
| 6m | -5.3% | +2.1% |
| 1y | +24.7% | +12.3% |
| ytd | +3.5% | +10.6% |
Bobby - Your AI Investment Partner
Get real-time data, AI-driven personalized investment analysis to make smarter investment decisions
TEX Fundamental Analysis
The revenue trajectory is genuinely strong but noisy. Q3 2026 revenue of $2.197 billion grew 58.4% year over year versus $1.387 billion in Q3 2025, and the sequential progression from $1.734 billion in Q1 to $2.238 billion in Q2 to $2.197 billion in Q3 shows a business running at a much higher quarterly run-rate than a year ago. However, the Q1 2026 figure of $1.734 billion was itself up 41% from $1.229 billion in Q1 2025, and the segment mix—$1.30 billion utility products, $839 million aerial work platforms, $279 million materials processing, $148 million specialty equipment, and $93 million other—suggests the utility/environmental business is now the largest contributor, a shift from the historical aerial-platforms-led profile. The 58.4% growth rate is almost certainly acquisition-inflated given the $467 million of acquisitions in Q1 2026 and the jump in share count, so the key question for the investment case is organic growth, which the data does not isolate; the consensus revenue estimate of $9.215 billion for the forward period implies continued expansion but at a more normalized pace.
Profitability has recovered sharply from a Q1 trough but remains thin for an industrial. Q3 2026 net income was $114 million on a 5.19% net margin, with gross margin of 19.8% and operating margin of 8.33%, a marked improvement from Q1 2026's -$89 million net loss, 11.88% gross margin, and -4.73% operating margin. The Q2 2026 quarter was similarly solid at $110 million net income and 19.84% gross margin, indicating the Q1 weakness—likely tied to acquisition integration, purchase accounting, and seasonal volume—was transient rather than structural. Still, the 19.4% trailing gross margin and 8.76% operating margin are below the 22–24% gross margins Terex posted in 2023–2024, reflecting mix shift toward lower-margin utility products and acquisition dilution; the 4.08% net margin is modest and leaves little cushion for cyclical downturns.
Balance sheet and cash flow are adequate but leverage has risen. Debt-to-equity is 1.34x, up from roughly 0.52x in the Q3 2026 historical ratio snapshot and 0.44x in 2023, consistent with debt-funded acquisitions; total debt to capitalization of 34.2% and long-term debt to capitalization of 34.0% are manageable but no longer conservative. Liquidity is a strength—current ratio of 2.30x and a quick ratio of 1.76x—and free cash flow TTM of $419 million against a $3.51 billion market cap implies an FCF yield of roughly 11.9%, which is high and suggests the market is discounting the cash generation. ROE of 10.55% is respectable but not exceptional, and with interest coverage of 3.73x and $49 million of quarterly interest expense, the company has limited headroom if rates stay elevated; the $407 million cash balance against $241 million of Q3 operating cash flow shows the business can fund itself, but the $467 million acquisition outlay means external financing remains part of the strategy.
Quarterly Revenue
$2.2B
2026-09
Revenue YoY Growth
+58.4%
YoY Comparison
Gross Margin
19.8%
Latest Quarter
Free Cash Flow
$419000000.0B
Last 12 Months
Revenue & Net Income Trends (2 Years)
Revenue Breakdown
Open an Account, get $2 TSLA now!
Valuation Analysis: Is TEX Overvalued?
Because Terex is profitable on a trailing basis (net income positive, EPS of $0.06 on a TTM basis per the key metrics, though quarterly EPS of $1.01 annualizes much higher), the PE ratio is the appropriate primary metric, and the trailing PE of 15.89x is the anchor. The forward PE field shows -0.48, which is not a usable forward multiple—it appears to be a data artifact (likely the PEG ratio mislabeled, given the identical value)—so the cleaner forward signal comes from the consensus EPS estimate of $6.86, which against the $54.96 price implies a forward PE of roughly 8.0x. That enormous gap between 15.9x trailing and ~8.0x forward implies the market expects earnings to more than double, consistent with the acquisition-driven revenue step-up and Q1 loss rolling out of the trailing window; the market is pricing skepticism about whether that earnings ramp materializes.
On peer comparison, Terex screens cheap across most multiples. The PS ratio of 0.65x, price-to-book of 1.68x, EV/EBITDA of 8.85x, and price-to-cash-flow of 7.98x are all well below what diversified industrial machinery peers typically command (EV/EBITDA in the low-to-mid teens, PS of 1.5–2.5x for CAT-type names). The 0.65x PS ratio is particularly striking given 58% revenue growth—it implies the market assigns very little value to the acquired revenue, likely because of the low 4.08% net margin and 19.4% gross margin that came with it. The 1.28% dividend yield and 20.4% payout ratio are modest but sustainable, and the negative PEG of -0.48 reflects the trailing earnings distortion rather than a genuine growth problem. On balance, the discount looks partly justified by leverage (1.34x D/E) and margin dilution, but the magnitude—EV/EBITDA of 8.85x versus a sector that historically trades in the 12–14x range—suggests the market is over-penalizing the stock.
Historical context reinforces the cheapness case. Terex's own PE ratio ranged from roughly 6.3x to 13.9x across 2022–2025 quarterly snapshots, and the current 15.89x trailing is actually at the high end of that band—but that is an artifact of depressed trailing earnings, not rich valuation. The PS ratio tells the cleaner story: 0.65x today versus 2.4–3.7x throughout 2022–2025, a multi-year low by a wide margin, and price-to-book of 1.68x is near the low end of its 1.2–2.8x historical range. The stock is therefore trading at or near the bottom of its own valuation band on revenue and book metrics, which typically signals either a value opportunity or fundamental deterioration; given the revenue growth and margin recovery in Q2/Q3, the weight of evidence favors the former, though the elevated leverage and dilution argue for position sizing discipline.
PE
15.9x
Latest Quarter
vs. Historical
High-End
5-Year PE Range 6x~19x
vs. Industry Avg
30.2x
Industry PE ~30.2x*
EV/EBITDA
8.9x
Enterprise Value Multiple
Investment Risk Disclosure
Financial and operational risks center on leverage and earnings quality. Debt-to-equity has climbed to 1.34x from roughly 0.44–0.52x previously, with quarterly interest expense of $49 million and interest coverage of only 3.73x, leaving thin headroom if EBITDA softens. The share count ballooned from ~66 million to 113.3 million, diluting per-share economics, while trailing gross margin of 19.4% and net margin of 4.08% are well below the 22–24% gross margins of 2023–2024. Earnings volatility is stark—Q1 2026 produced a -$89 million net loss and -$2 million EBITDA before a sharp Q2/Q3 rebound—and the business depends on sustaining the ~$2.2 billion quarterly revenue run-rate to justify current earnings expectations.
Market and competitive risks stem from cyclicality and valuation uncertainty. Terex is levered to nonresidential construction, aggregates/mining, and utility spending, and its 3-month relative strength of -13.94% versus SPY signals high sensitivity to industrial sentiment even as 1-month relative strength of +6.52% shows a fragile bounce. The stock trades at 0.65x PS and 8.85x EV/EBITDA—cheap versus peers at 12–14x—but that discount could persist or widen if the market continues to penalize the acquired, low-margin revenue. The wide $5.86–$7.98 analyst EPS range (36% spread) and the absence of fresh upgrades mean sentiment could shift quickly; a Q4 miss or integration stumble would likely trigger downgrades that the current no-downgrade record does not anticipate.
Worst-case scenario: a cyclical downturn in nonresidential construction coincides with margin compression and integration missteps, forcing the market to re-rate the stock toward its 52-week low of $49.68 (a ~10% decline from $54.96) and potentially into the low-to-mid $40s if that support breaks, consistent with the -33.39% max drawdown already experienced. A retest of the $74.58 high is the upside mirror, but the realistic downside from current levels is roughly -10% to the October low and -20% to -30% in a full cyclical de-rating scenario. Position sizing should account for realized volatility well above the market given the 25% single-day range between the October 27 low and October 29 high.
FAQ
Ranked by severity: first, balance-sheet risk—debt-to-equity of 1.34x versus roughly 0.44–0.52x previously, with $49 million of quarterly interest expense and interest coverage of only 3.73x, leaves little room if EBITDA softens. Second, earnings-quality and dilution risk—shares outstanding rose from about 66 million to 113.3 million (a 71% increase) tied to $467 million of Q1 acquisitions, and gross margin of 19.4% is below the 22–24% of 2023–2024, so per-share value creation lags the 58.4% revenue headline. Third, cyclical and end-market risk—exposure to nonresidential construction, aggregates/mining, and utility spending, evidenced by a 3-month relative strength of -13.94% versus SPY and a -33.39% max drawdown. Fourth, sentiment and estimate risk—the $5.86–$7.98 EPS range is a 36% spread, and with no downgrades yet on record, a Q4 miss could trigger the first one and a sharp re-rating.
The scenario framework assigns a 50% probability to a base case of $58–$72, in which consensus revenue of $9.215 billion and EPS of $6.86 are broadly met but the multiple stays pinned near 8–10x forward earnings, leaving the stock range-bound between the $49.68 October low and the $68–$70 supply zone. The 25% bull case targets $82–$96 and requires gross margin back above 20%, operating margin at or above 8.3%, and a re-rating toward 12–14x EV/EBITDA as deleveraging progresses. The 25% bear case targets $40–$50 on a nonresidential construction downturn, gross margin below 18%, and the first analyst downgrade. The base case is most likely, and its key assumption is that forward EPS near $6.86 materializes at roughly 8.0x forward earnings without a fresh catalyst to force the re-rating.
On most metrics Terex screens undervalued relative to both peers and its own history. The PS ratio of 0.65x is a multi-year low against a 2.4–3.7x range in 2022–2025, price-to-book of 1.68x sits near the bottom of a 1.2–2.8x band, and EV/EBITDA of 8.85x is well below the 12–14x diversified machinery peers typically command. The trailing PE of 15.89x looks high only because trailing earnings are depressed by the Q1 2026 loss; against the $6.86 consensus forward EPS the multiple is roughly 8.0x. The market is therefore pricing real skepticism—that the acquired revenue deserves little credit given a 4.08% net margin and 19.4% gross margin, and that leverage at 1.34x debt-to-equity and 71% share dilution offset the growth. The discount looks partly earned but excessive in magnitude, making the stock cheap on revenue and cash flow and only modestly cheap on earnings.
The risk/reward is moderately favorable but not compelling enough to chase. On the upside, the stock trades at 0.65x PS and 8.85x EV/EBITDA versus a 12–14x peer band, and applying that band to the $6.86 consensus forward EPS implies fair value of roughly $82–$96—though that is inferred, since no explicit average price target is in the data. Downside is well mapped: the 52-week low of $49.68 sits about 10% below the $54.96 price, and a full cyclical de-rating consistent with the -33.39% max drawdown could take shares into the low-to-mid $40s. Analyst sentiment is constructive with 6 of 10 Buy-rated and zero downgrades after the October 29 Q3 print, but the 36% spread in EPS estimates ($5.86–$7.98) shows weak conviction on magnitude. It is a reasonable buy for value-oriented investors with a 12–24 month horizon who can tolerate leverage and cyclicality, and a poor fit for anyone needing near-term catalysts or low volatility.
Terex is better suited to a medium-to-long holding period than to short-term trading. The stock's realized volatility is high—a -33.39% max drawdown and a 25% single-day range between the October 27 low and October 29 high—and its 3-month relative strength of -13.94% versus SPY shows it is highly sensitive to industrial sentiment, making short-term positioning a bet on timing rather than value. The value case needs time to play out: deleveraging from 1.34x debt-to-equity using $419 million of TTM free cash flow, and disclosure of organic growth beneath the 58.4% headline, are multi-quarter processes. The 1.28% dividend yield with a 20.4% payout ratio provides modest income but not a reason to own it. A minimum holding period of 12–24 months is appropriate, sized for drawdowns of 20–30%, with the Q4 print as the first real checkpoint.