JPMorgan raises Terex stock price target to $50, maintains neutral

On Tuesday, JPMorgan analyst Ann Duignan updated Terex Corporation’s (NYSE:TEX) financial outlook, increasing the price target from $43.00 to $50.00 while keeping a Neutral rating on the stock. Currently trading at $47.63 with a P/E ratio of 12.75, InvestingPro analysis suggests the stock is slightly overvalued at these levels. The adjustment comes after a meeting with Terex’s CFO Jennifer Kong-Picarello, Environmental Services President Pat Carroll, and VP of Investor Relations Derek Everitt.

During the meeting, several key points were discussed. With a solid financial health score of "GOOD" and a strong current ratio of 2.11 according to InvestingPro data, Terex appears well-positioned to navigate market challenges. Notably, after a significant destocking period in the fourth quarter of 2024 and the first quarter of 2025, Terex management anticipates that margin pressures related to cost absorption in the Aerials segment will subside. This is expected due to a seasonal increase in volumes, with operating margins projected to reach low double digits in the second quarter of 2025. Management also suggested that if demand in 2026 is driven primarily by replacement needs from the 2018-2019 cohort, volumes could remain steady or even increase year-over-year, assuming macro uncertainties and interest rate pressures diminish.

Inventory levels for the Materials Processing (MP) segment were also discussed, with North American dealer inventory being more stable than in Europe, where supply is currently exceeding typical levels. Additionally, Terex is focusing on growing recurring revenues by incorporating strategies from the Environmental, Social, and Governance (ESG) playbook. This includes integrating services and software from its 3rd Eye acquisition and improving customer re-ordering processes with tools like image recognition and e-commerce platforms.

Another point of discussion was the impact of increased Section 232 tariffs on steel and aluminum starting in June. Terex is reportedly well-positioned to manage these costs, as approximately half of its steel demand is hedged at a favorable price for the remainder of the year and into early next year. The anticipated earnings per share (EPS) impact from tariffs was initially quantified during the first quarter of 2025 earnings call, but with the reduction of tariffs on Chinese imports from 145% to 30%, the pressure on third-quarter margins is expected to be less than previously expected.

In light of these discussions, JPMorgan has revised its earnings per share estimates for Terex upwards, with projections of $4.78 for 2025 and $5.19 for 2026. The company currently generates $539M in EBITDA and maintains a consistent dividend yield of 1.43%, having maintained dividend payments for 13 consecutive years. The new December 2025 price target of $50 is based on approximately 7 times the fiscal year one enterprise value to EBITDA and around 10 times the fiscal year one price to earnings ratio. Despite the raised price target, the firm maintains a neutral stance on Terex stock. For deeper insights into Terex’s valuation and financial health, including access to comprehensive Pro Research Reports covering 1,400+ top stocks, visit InvestingPro.

In other recent news, Terex Corporation has been the focus of several analyst upgrades and corporate developments. Goldman Sachs upgraded Terex’s stock rating from Neutral to Buy, setting a new price target of $60. This decision is based on a potential recovery in the company’s Aerials segment and the acquisition of Environmental Services Group, which now contributes significantly to Terex’s profits. UBS also upgraded Terex from Sell to Neutral, with a price target of $48, acknowledging the company’s improvements and ESG initiatives, though noting potential earnings pressure in 2025. Similarly, Citi raised its price target to $51 from $36, following strong first-quarter results and revised earnings forecasts.

Meanwhile, Baird upgraded Terex from Neutral to Outperform, boosting the price target to $66, citing a potential turnaround in earnings. The analysts believe that reduced tariff risks and low investor expectations may provide a favorable entry point for value investors. In addition to these upgrades, Terex announced amendments to its bylaws, aligning them with recent legal updates and enhancing transparency in shareholder meetings. These developments, including the election of eight directors and shareholder approvals, reflect Terex’s commitment to robust governance practices. The company’s recent performance and strategic decisions have garnered attention from analysts and investors alike.

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