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On Tuesday, Baird analysts adjusted their stance on Terex Corporation (NYSE:TEX), upgrading the stock from a Neutral to Outperform rating, while also significantly increasing the price target to $66.00, up from the previous $48.00. The stock, currently trading at $44.79, has shown significant momentum with a 13.4% return over the last week, according to InvestingPro data. The platform’s analysis reveals the company maintains a "GOOD" overall financial health score, with particularly strong marks in profitability and relative value metrics. The change in valuation comes after a period of underperformance for Terex, which has seen its stock price lag for more than two years. The analysts at Baird have identified a potential turnaround in the company’s earnings per share (EPS), forecasting a bottoming out in 2025 that could lead to a revaluation of the stock to a price range of $60 to $75.
The analysts cited several factors that could contribute to this optimistic outlook. Despite the challenges of predicting market trends at the lowest point of a machinery downcycle, they believe that current low investor expectations, reduced tariff risks, consecutive years of demand and earnings decline, coupled with a still compressed valuation—approximately 10 times the projected 2025 price-to-earnings ratio—may offer an attractive entry point for value investors. InvestingPro data shows the company currently trades at a P/E ratio of 10.8x with a healthy current ratio of 2.11, indicating strong liquidity. For deeper insights into Terex’s valuation metrics and 8 additional exclusive ProTips, consider accessing the comprehensive Pro Research Report.
Terex, a global manufacturer of lifting and material processing products, has experienced a reset in earnings following the peak in demand that occurred after the COVID-19 pandemic. However, Baird analysts suggest that the company’s earnings could stabilize, setting the stage for normal multiple expansion. The company has demonstrated financial resilience with an EBITDA of $539 million in the last twelve months and maintains a strong dividend track record, having maintained payments for 13 consecutive years. InvestingPro analysis indicates the stock is currently slightly overvalued relative to its Fair Value, with analysts providing mixed targets ranging from $33 to $59. This expansion is expected to drive Terex’s stock into the $60 to $75 range, based on 15 to 17 times the next twelve months (NTM) earnings.
The upgrade reflects a more positive outlook on Terex’s potential for earnings recovery and stock performance. As per Baird’s analysis, the company’s stock is currently trading at a valuation that does not fully reflect its earnings potential over the next few years.
Investors and market watchers will likely monitor Terex’s performance closely, as it attempts to navigate the predicted bottoming of its EPS and capitalize on the factors that Baird analysts believe could lead to a significant appreciation in its stock price. With an expected EPS of $4.72 for FY2025 and a beta of 1.53 indicating higher market sensitivity, the stock presents an interesting case for investors seeking detailed analysis through comprehensive research tools available on InvestingPro.
In other recent news, Terex Corporation reported its first-quarter 2025 financial results, revealing a significant earnings per share (EPS) of $0.83, which surpassed the forecast of $0.52. Despite a slight revenue miss, with actual revenue at $1.2 billion compared to the expected $1.24 billion, the company demonstrated strong operational efficiency. Terex’s backlog increased by 13% sequentially, suggesting robust future demand. The company is maintaining its full-year EPS guidance despite potential tariff impacts, with an EPS projection of $4.70 to $5.10. Analyst discussions highlighted the company’s strategic initiatives to mitigate tariff impacts through supply chain alternatives. The firm also aims to achieve operational synergies from its recent ESG acquisition. Looking ahead, Terex anticipates a net tariff impact of $0.40 and expects operating margins to reach approximately 12%. The company’s strategic focus on reducing SG&A costs by $20 million and achieving operational synergies is expected to support its financial performance throughout the year.
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