Terex
TEX
$50.99
-3.15%
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 Industrials sector. The company is a focused niche player in light construction and vocational equipment, having divested underperforming crane and lifting businesses to concentrate on three core pillars: aerial work platforms (~40% of sales), materials processing (~30%), and environmental solutions (~30%). The current investor narrative is dominated by the transformational acquisition that roughly doubled the revenue base (Q2 2026 revenue up 50.5% year-over-year to $2.24 billion) while simultaneously pressuring the balance sheet and margins, creating a debate over whether Terex can integrate and deleverage without sacrificing its cyclical earnings power. Recent read-through commentary from Caterpillar's strong volume growth and raised guidance has offered a modest positive signal for construction-equipment peers, but Terex shares have nonetheless de-rated sharply as investors weigh integration risk, elevated leverage, and a soft nonresidential construction backdrop against a consensus that still leans constructive.…
TEX
Terex
$50.99
Related headlines
Investment Opinion: Should I buy TEX Today?
Rating: Hold. The core thesis is that Terex offers deep value at 8.6x forward earnings and 0.65x sales, but integration risks and margin pressure justify waiting for clearer execution; the analyst consensus 'buy' with a $76.09 average target implies 49% upside, yet the stock's severe downtrend and leverage warrant caution.
Supporting evidence includes the 50.5% revenue growth in Q2 2026 to $2.238 billion, TTM free cash flow of $339 million, and a forward PE of 8.6x versus a trailing PE of 15.9x, suggesting earnings are expected to roughly double. However, gross margin of 19.4% and net margin of 4.1% are below peers, and debt-to-equity of 1.34x is elevated. The implied upside to the average target is substantial, but the low target of $58 is only 14% above the current price, limiting downside support.
Key risks include integration missteps, margin compression, and cyclical demand weakness. This Hold would upgrade to Buy if gross margins stabilize above 20% and free cash flow conversion improves, or downgrade to Sell if revenue growth decelerates below 10% or leverage increases. Relative to history and peers, TEX appears undervalued on most metrics, but the discount is justified by lower profitability and higher leverage, making it fairly valued until execution improves.
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TEX 12-Month Price Forecast
Terex presents a balanced risk/reward with a neutral stance: the deep valuation discount and strong analyst consensus offer upside, but integration risks, margin compression, and high leverage cap near-term potential. The base case (50% probability) sees the stock reaching $58-$76 as earnings meet consensus, while the bear case (25%) could push it to $41.70 if execution falters. We would upgrade to bullish if gross margins recover above 20% and free cash flow exceeds $400 million, or downgrade to bearish if leverage rises above 1.5x or organic growth turns negative.
Wall Street consensus
Most Wall Street analysts maintain a constructive view on Terex's 12-month outlook, with a consensus price target around $76.09 and implied upside of +49.2% versus the current price.
Average Target
$76.09
0 analysts
Implied Upside
+49.2%
vs. current price
Analyst Count
—
covering this stock
Price Range
$58 - $98
Analyst target range
Coverage is solid, with 13 analysts following Terex and a consensus recommendation of "buy" (mean rating of 2.0 on a scale where lower is more bullish). The average target price is $76.09, implying roughly +49% upside from the current $50.99 — a strikingly wide gap that reflects either significant undervaluation or stale targets that have not yet been cut to reflect the recent 13% one-month decline. The consensus leans clearly bullish, but the magnitude of the implied upside against a stock in freefall warrants skepticism about target freshness.
The target range of $58.00 to $98.00 is extremely wide — a 69% spread from low to high — signaling high uncertainty and low conviction. The high target of $98 assumes successful integration, margin recovery toward historical levels, multiple expansion, and a cyclical construction rebound; the low target of $58 still sits 14% above the current price, implying even the bear case sees upside. Institutional ratings show a stable-to-constructive pattern: Citigroup upgraded to Buy from Neutral in March 2026, Evercore ISI, Truist, and Barclays maintain Outperform/Buy/Overweight, while JP Morgan remains Neutral — no recent downgrades, but also no fresh upgrades since August. The wide dispersion and lack of recent target revisions suggest analysts are waiting for integration clarity before re-rating the stock.
Bulls vs Bears: TEX Investment Factors
The bear case currently has stronger evidence, driven by the severe technical downtrend, elevated leverage, and margin compression, which outweigh the optimistic analyst targets and deep valuation discount. The most critical tension is whether Terex can successfully integrate its transformative acquisition and deleverage without sacrificing margins—a factor that, if resolved positively, could trigger a sharp re-rating, but if mishandled, could lead to further downside. The stock's high beta and cyclical exposure amplify both risks and potential rewards, making it a high-stakes turnaround story.
Bullish
- Deep valuation discount to peers: TEX trades at 0.65x PS, 1.24x EV/Sales, and 8.85x EV/EBITDA, all well below typical industrial machinery peers (EV/EBITDA in the low-to-mid teens). The forward PE of 8.6x is near the bottom decile of its historical range, implying the market has priced in significant pessimism.
- Analyst consensus still bullish with large upside: 13 analysts rate TEX a 'buy' (mean 2.0) with an average target of $76.09, implying 49% upside from $50.99. Even the low target of $58 is 14% above the current price, suggesting the selloff may be overdone relative to fundamental views.
- Transformational acquisition doubles revenue: Q2 2026 revenue surged 50.5% YoY to $2.238 billion, driven by the acquisition that added Utility Products ($1.30B) and expanded Aerial Work Platforms ($839M). This scale could drive operating leverage and cross-selling opportunities as integration progresses.
- Strong free cash flow and liquidity: TTM free cash flow is $339 million, with Q2 2026 FCF of $95 million. The current ratio of 2.30x indicates ample short-term liquidity, and the dividend yield of 1.28% with a 20.4% payout ratio is sustainable, providing a modest income cushion.
Bearish
- Severe technical downtrend and underperformance: TEX is down 22.0% over three months and 13.3% over one month, massively underperforming the S&P 500 (which gained 2.69% and 1.22%, respectively). The stock sits at just 26.6% of its 52-week range, with a max drawdown of -32.06%, signaling persistent selling pressure and no clear bottom.
- Elevated leverage and thin interest coverage: Debt-to-equity is 1.34x and interest coverage is only 3.74x, leaving limited cushion. The Q1 2026 acquisition consumed $467 million of cash, and deleveraging will require sustained free cash flow conversion, which is uncertain given lumpy quarterly FCF (Q1 2026 outflow of -$57 million).
- Margin compression and volatile earnings: Gross margin has fallen to 19.4% (TTM) from 23-24% in 2023-2024, and Q1 2026 posted a net loss of -$89 million with an 11.88% gross margin. The acquired business appears lower-margin, and integration noise could continue to pressure profitability.
- High beta and sector rotation risk: With a beta of 1.473, TEX is 47% more volatile than the market, making it vulnerable to macroeconomic shifts and sector rotations. A soft nonresidential construction backdrop could exacerbate earnings volatility given the cyclical nature of its end markets.
TEX Technical Analysis
Terex is in a clear, sustained downtrend that has erased the stock's earlier 2026 gains. The shares are down 6.30% over the trailing year, 7.34% year-to-date, and 16.16% over six months, with the current price of $50.99 sitting at just 26.6% of the 52-week range ($41.70 low to $74.69 high) — a positioning that signals persistent selling pressure rather than a value floor, and one that has produced a max drawdown of -32.06%. The stock is trading roughly 32% below its 52-week high, placing it firmly in the lower third of its annual range and in "falling knife" territory until a base forms.
Short-term momentum is decisively negative and accelerating to the downside. The 1-month change of -13.31% and 3-month change of -22.02% are both far worse than the 1-year decline of -6.30%, meaning the selloff has intensified rather than stabilized — a bearish acceleration pattern. This is corroborated by dramatic relative underperformance: relative strength versus SPY is -14.53% over one month, -24.71% over three months, and -21.83% over one year, while SPY itself gained 1.22% and 2.69% over those same one- and three-month windows. The stock's most recent session fell another 3.15% on volume of roughly 1.65 million shares, confirming that sellers remain in control with no visible capitulation signal yet.
Key technical levels are well defined. Immediate support sits at the 52-week low of $41.70, roughly 18% below the current $50.99; a breakdown there would signal a deeper structural de-rating and likely force further institutional liquidation. Resistance is anchored at the 52-week high of $74.69, but the more relevant near-term hurdle is the $57–$60 zone where the stock repeatedly failed in September 2026. With a beta of 1.473, Terex is roughly 47% more volatile than the S&P 500, meaning position sizing should be materially smaller than a market-weight allocation and stop-losses should be set wider to avoid noise-driven exits.
Beta
1.47
1.47x market volatility
Max Drawdown
-32.1%
Largest decline past year
52-Week Range
$42-$75
Price range past year
Annual Return
-6.3%
Cumulative gain past year
| Period | TEX Return | S&P 500 |
|---|---|---|
| 1m | -13.3% | +0.2% |
| 3m | -22.0% | +2.9% |
| 6m | -16.2% | +8.4% |
| 1y | -6.3% | +14.9% |
| ytd | -7.3% | +11.9% |
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TEX Fundamental Analysis
Terex's revenue trajectory has been transformed by acquisition, but organic momentum is harder to discern. Q2 2026 revenue of $2.238 billion grew 50.5% year-over-year versus $1.487 billion in Q2 2025, yet the sequential path is uneven: Q1 2026 revenue of $1.734 billion was followed by the Q2 jump, while Q4 2025 revenue of $1.318 billion and Q3 2025 revenue of $1.387 billion show the pre-deal baseline. Segment data reveals the concentration risk: Utility Products at $1.30 billion and Aerial Work Platforms at $839 million dominate the mix, with Materials Processing at $279 million, Specialty Equipment at $148 million, and Other Products and Services at $93 million. The growth is inorganic-led, so the investment case now hinges on whether management can convert scale into durable organic growth rather than merely consolidating the top line.
Profitability is thin and volatile, with margins that look structurally low for an industrial machinery manufacturer. Q2 2026 gross margin was 19.84% ($444 million on $2.238 billion revenue), operating margin 8.36%, and net margin 4.92% ($110 million net income), while the trailing gross margin of 19.39% and operating margin of 8.76% confirm the level. The quarterly swing is stark: Q1 2026 posted a net loss of -$89 million (net margin -5.13%) and gross margin of just 11.88%, versus Q2 2025's 19.64% gross margin and $72 million net income. The Q1 loss reflects integration and purchase-accounting noise plus seasonal weakness, but the 19–20% gross margin band is well below the 23–24% levels Terex earned in 2023–2024, suggesting the acquired business carries lower margins and dilutes the blended profile.
Balance-sheet leverage and cash generation are the central fundamental risk. Debt-to-equity stands at 1.34x, with total debt to capitalization of 35.3% and a current ratio of 2.30x providing adequate near-term liquidity, but interest coverage of just 3.74x leaves limited cushion. Free cash flow TTM is $339 million, though the quarterly pattern is lumpy: Q2 2026 FCF of $95 million followed a Q1 2026 outflow of -$57 million, and the Q1 acquisition consumed $467 million of investing cash. ROE is a modest 10.55% and ROA just 2.81%, while the dividend yield of 1.28% and payout ratio of 20.4% are sustainable but unremarkable. The company can fund capex ($33 million in Q2 2026) internally, but deleveraging will require sustained FCF conversion rather than external financing.
Quarterly Revenue
$2.2B
2026-06
Revenue YoY Growth
+50.5%
YoY Comparison
Gross Margin
19.8%
Latest Quarter
Free Cash Flow
$339000000.0B
Last 12 Months
Revenue & Net Income Trends (2 Years)
Revenue Breakdown
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Valuation Analysis: Is TEX Overvalued?
Because Terex remains profitable on a trailing basis (net income positive), the PE ratio is the appropriate primary metric. The trailing PE is 15.89x versus a forward PE of 8.60x — a 46% compression that implies the market expects earnings to roughly double, consistent with consensus EPS of $6.82 versus the current trailing EPS of $0.063 (which is distorted by the Q1 loss and share-count changes). The forward multiple of 8.6x is optically cheap for an industrial, but the gap signals that the market is skeptical the forward estimate is achievable given integration and cyclical risk.
On peer comparison, Terex trades at a meaningful discount across most metrics. Its PS ratio of 0.65x, EV/Sales of 1.24x, and EV/EBITDA of 8.85x are all well below what a diversified industrial machinery peer group typically commands (EV/EBITDA in the low-to-mid teens), while its PB of 1.68x and PCF of 7.98x are similarly depressed. The discount is partly justified: gross margin of 19.4% and net margin of 4.1% are below the 25–30% gross and high-single-digit net margins typical of higher-quality machinery names, and leverage of 1.34x debt-to-equity is elevated. The market is pricing Terex as a lower-quality, cyclical, leveraged consolidator rather than a premium franchise.
Historically, Terex's valuation sits near the low end of its own multi-year band. Its PE has ranged from roughly 6x to 30x over the past several years, and the current trailing 15.9x is mid-range but the forward 8.6x is near the bottom decile of its historical distribution. The PS ratio of 0.65x is dramatically below the 2.0–3.7x range seen throughout 2022–2026, reflecting the post-acquisition revenue base rather than a true collapse in enterprise value. This suggests the market is pricing in either fundamental deterioration (margin compression, integration missteps) or a deep cyclical trough — a setup that offers value only if earnings estimates hold.
PE
15.9x
Latest Quarter
vs. Historical
High-End
5-Year PE Range 6x~19x
vs. Industry Avg
N/A
Industry PE ~N/A*
EV/EBITDA
8.9x
Enterprise Value Multiple
Investment Risk Disclosure
Financial and operational risks are significant: debt-to-equity of 1.34x and interest coverage of only 3.74x leave little room for error, especially with lumpy free cash flow (Q1 2026 outflow of -$57 million). The acquisition consumed $467 million in Q1 2026, and gross margin has compressed to 19.4% from 23-24% historically, indicating the acquired business is dilutive. Revenue concentration in Utility Products ($1.30 billion) and Aerial Work Platforms ($839 million) adds vulnerability to cyclical downturns in construction and utility spending.
Market and competitive risks include the stock's high beta of 1.473, which amplifies market swings, and a soft nonresidential construction backdrop that could pressure demand. Valuation compression risk is real: the forward PE of 8.6x is already low, but if earnings estimates are cut, the stock could de-rate further. Competitive disruption from larger players like Caterpillar and industry cyclicality pose ongoing threats, and the wide analyst target dispersion ($58-$98) reflects uncertainty that could lead to volatility.
The worst-case scenario involves a failed integration, margin deterioration, and a cyclical downturn, which could drive the stock to its 52-week low of $41.70, representing a 18.2% decline from the current $50.99. If analyst low target of $58 is breached and selling accelerates, the max drawdown of -32.06% suggests a potential drop to around $34.65, a 32% loss. Such a scenario would likely trigger further institutional liquidation and could force a dividend cut or equity raise, compounding the downside.
FAQ
The most severe risk is financial: debt-to-equity of 1.34x and interest coverage of 3.74x leave little cushion, and free cash flow is lumpy (Q1 2026 outflow of -$57 million). Competitive and operational risks include margin compression (gross margin 19.4% vs. 23-24% historically) and integration challenges that could delay synergies. Macro risks are amplified by a beta of 1.473, making TEX 47% more volatile than the market, and a soft nonresidential construction backdrop could reduce demand. Company-specific risks include revenue concentration in Utility Products ($1.30 billion) and the potential for further earnings volatility.
Our 12-month forecast has three scenarios: bull case (25% probability) targets $76-$98 on successful integration and margin recovery; base case (50%) targets $58-$76 as earnings meet consensus of $6.82 per share; bear case (25%) targets $41.70-$58 if integration falters and leverage rises. The base case is most likely, assuming gross margins stabilize around 19-20% and free cash flow remains above $300 million. Key catalysts include Q3 2026 earnings, debt reduction progress, and construction demand trends.
TEX appears undervalued on most metrics: its PS ratio of 0.65x is far below the 2.0-3.7x range seen in 2022-2026, and EV/EBITDA of 8.85x is well below industrial peers in the low-to-mid teens. The forward PE of 8.6x is near the bottom decile of its historical range, implying the market expects earnings to roughly double. However, the discount is partly justified by lower margins (gross margin 19.4% vs. peers 25-30%) and higher leverage. The market is pricing TEX as a leveraged cyclical consolidator, so the stock is undervalued only if earnings estimates hold and integration succeeds.
TEX is a high-risk, high-reward opportunity: the stock trades at a 49% discount to the analyst average target of $76.09, with a forward PE of 8.6x that is near historical lows. However, the severe downtrend (down 22% in three months) and elevated leverage (debt-to-equity 1.34x) suggest caution. The biggest downside risk is a failed integration leading to margin compression and a test of the 52-week low of $41.70, an 18% decline. For value investors with a long horizon and tolerance for volatility, TEX could be a good buy on stabilization signs, but conservative investors should wait for clearer execution.
TEX is better suited for long-term investors with a 2-3 year horizon who can tolerate volatility, as the integration and deleveraging story will take time to play out. The high beta of 1.473 and cyclical exposure make it unsuitable for short-term trading unless using tight risk controls. The dividend yield of 1.28% is modest but sustainable, providing little income support. Earnings visibility is low due to integration noise, so investors should monitor quarterly margins and cash flow before committing. A minimum holding period of 18-24 months is recommended to capture potential recovery.