Latest news with #TerexCorporation
Yahoo
24-06-2025
- Business
- Yahoo
An Intrinsic Calculation For Terex Corporation (NYSE:TEX) Suggests It's 33% Undervalued
The projected fair value for Terex is US$66.67 based on 2 Stage Free Cash Flow to Equity Terex's US$44.82 share price signals that it might be 33% undervalued The US$49.95 analyst price target for TEX is 25% less than our estimate of fair value Today we will run through one way of estimating the intrinsic value of Terex Corporation (NYSE:TEX) by taking the expected future cash flows and discounting them to their present value. One way to achieve this is by employing the Discounted Cash Flow (DCF) model. Don't get put off by the jargon, the math behind it is actually quite straightforward. We would caution that there are many ways of valuing a company and, like the DCF, each technique has advantages and disadvantages in certain scenarios. For those who are keen learners of equity analysis, the Simply Wall St analysis model here may be something of interest to you. AI is about to change healthcare. These 20 stocks are working on everything from early diagnostics to drug discovery. The best part - they are all under $10bn in marketcap - there is still time to get in early. We are going to use a two-stage DCF model, which, as the name states, takes into account two stages of growth. The first stage is generally a higher growth period which levels off heading towards the terminal value, captured in the second 'steady growth' period. To start off with, we need to estimate the next ten years of cash flows. Where possible we use analyst estimates, but when these aren't available we extrapolate the previous free cash flow (FCF) from the last estimate or reported value. We assume companies with shrinking free cash flow will slow their rate of shrinkage, and that companies with growing free cash flow will see their growth rate slow, over this period. We do this to reflect that growth tends to slow more in the early years than it does in later years. Generally we assume that a dollar today is more valuable than a dollar in the future, and so the sum of these future cash flows is then discounted to today's value: 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 Levered FCF ($, Millions) US$538.0m US$431.0m US$373.5m US$341.9m US$324.6m US$316.0m US$313.0m US$313.6m US$316.8m US$321.9m Growth Rate Estimate Source Analyst x1 Analyst x1 Est @ -13.35% Est @ -8.46% Est @ -5.04% Est @ -2.65% Est @ -0.97% Est @ 0.20% Est @ 1.02% Est @ 1.60% Present Value ($, Millions) Discounted @ 9.5% US$491 US$359 US$284 US$238 US$206 US$183 US$166 US$151 US$140 US$130 ("Est" = FCF growth rate estimated by Simply Wall St)Present Value of 10-year Cash Flow (PVCF) = US$2.3b We now need to calculate the Terminal Value, which accounts for all the future cash flows after this ten year period. The Gordon Growth formula is used to calculate Terminal Value at a future annual growth rate equal to the 5-year average of the 10-year government bond yield of 2.9%. We discount the terminal cash flows to today's value at a cost of equity of 9.5%. Terminal Value (TV)= FCF2034 × (1 + g) ÷ (r – g) = US$322m× (1 + 2.9%) ÷ (9.5%– 2.9%) = US$5.0b Present Value of Terminal Value (PVTV)= TV / (1 + r)10= US$5.0b÷ ( 1 + 9.5%)10= US$2.0b The total value, or equity value, is then the sum of the present value of the future cash flows, which in this case is US$4.4b. In the final step we divide the equity value by the number of shares outstanding. Compared to the current share price of US$44.8, the company appears quite good value at a 33% discount to where the stock price trades currently. Valuations are imprecise instruments though, rather like a telescope - move a few degrees and end up in a different galaxy. Do keep this in mind. Now the most important inputs to a discounted cash flow are the discount rate, and of course, the actual cash flows. If you don't agree with these result, have a go at the calculation yourself and play with the assumptions. The DCF also does not consider the possible cyclicality of an industry, or a company's future capital requirements, so it does not give a full picture of a company's potential performance. Given that we are looking at Terex as potential shareholders, the cost of equity is used as the discount rate, rather than the cost of capital (or weighted average cost of capital, WACC) which accounts for debt. In this calculation we've used 9.5%, which is based on a levered beta of 1.521. Beta is a measure of a stock's volatility, compared to the market as a whole. We get our beta from the industry average beta of globally comparable companies, with an imposed limit between 0.8 and 2.0, which is a reasonable range for a stable business. View our latest analysis for Terex Strength Debt is well covered by earnings. Dividends are covered by earnings and cash flows. Weakness Earnings declined over the past year. Dividend is low compared to the top 25% of dividend payers in the Machinery market. Opportunity Annual earnings are forecast to grow faster than the American market. Good value based on P/E ratio and estimated fair value. Threat Debt is not well covered by operating cash flow. Annual revenue is forecast to grow slower than the American market. Valuation is only one side of the coin in terms of building your investment thesis, and it ideally won't be the sole piece of analysis you scrutinize for a company. It's not possible to obtain a foolproof valuation with a DCF model. Rather it should be seen as a guide to "what assumptions need to be true for this stock to be under/overvalued?" For instance, if the terminal value growth rate is adjusted slightly, it can dramatically alter the overall result. Can we work out why the company is trading at a discount to intrinsic value? For Terex, there are three additional elements you should assess: Risks: For example, we've discovered 2 warning signs for Terex (1 makes us a bit uncomfortable!) that you should be aware of before investing here. Management:Have insiders been ramping up their shares to take advantage of the market's sentiment for TEX's future outlook? Check out our management and board analysis with insights on CEO compensation and governance factors. Other Solid Businesses: Low debt, high returns on equity and good past performance are fundamental to a strong business. Why not explore our interactive list of stocks with solid business fundamentals to see if there are other companies you may not have considered! PS. The Simply Wall St app conducts a discounted cash flow valuation for every stock on the NYSE every day. If you want to find the calculation for other stocks just search here. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Sign in to access your portfolio
Yahoo
23-06-2025
- Business
- Yahoo
Terex Corporation (TEX): A Bull Case Theory
We came across a bullish thesis on Terex Corporation on Value Don't Lie's Substack. In this article, we will summarize the bull's thesis on TEX. Terex Corporation's share was trading at $45.39 as of 19th June. TEX's trailing and forward P/E ratios were 12.37 and 9.35, respectively, according to Yahoo Finance. A large construction project with cranes and forklifts in action, demonstrating the company's building materials business. Terex Corp (TEX), a capital goods manufacturer serving sectors like construction, utilities, mining, and waste management, trades at 9.4x earnings and 8x EBITDA levels that may reflect trough-year assumptions rather than long-term potential. Despite a flat share price since 2021, TEX's core segments—Materials Processing (MP) and Aerial Work Platforms (AWP)—hold top market positions but are undergoing a cyclical correction following supernormal COVID-era demand. Backlogs and earnings are reverting to 2018–2019 levels, suggesting a bottoming out in 2025. A transformative event for TEX was its $2 billion debt-funded acquisition of Dover's Environmental Solutions Group (ESG) in late 2024. ESG is the market leader in refuse collection and compaction equipment and adds a higher-quality, less cyclical profile to the portfolio. With 20%+ EBITDA margins, consistent organic growth, and strong aftermarket and digital revenue streams, ESG provides a potential uplift to Terex's overall business quality. The acquisition is significant relative to TEX's $3 billion market cap and could make or break shareholder returns over the next few years. For 2025, guidance implies $660 million EBITDA and $4.70–$5.10 EPS, while free cash flow is expected at $300–350 million, translating to a modest 9.4x P/E and FCF multiple, below the 10-year median of 11.2x. Assuming 2025 marks a cyclical low and 2026 targets of $740 million EBITDA and $5.76 EPS are hit, shares could be worth $63–66 versus $46 today. While the risk/reward appears tilted favorably for a cyclical recovery, execution on ESG integration and macro timing remain critical for upside to materialize. Previously, we covered a on Terex Corporation by Quick Value in June 2025, which highlighted the company's undervaluation, cyclical earnings trough, and the transformative ESG acquisition funded by debt. The company's stock price has depreciated by approximately 0.2% since our coverage. This is because the thesis hasn't played out yet due to soft macro conditions. Value Don't Lie shares an identical view but emphasizes ESG integration as the key swing factor. Terex Corporation is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 33 hedge fund portfolios held TEX at the end of the first quarter, which was 33 in the previous quarter. While we acknowledge the risk and potential of TEX as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an extremely cheap AI stock that is also a major beneficiary of Trump tariffs and onshoring, see our free report on the best short-term AI stock. READ NEXT: 8 Best Wide Moat Stocks to Buy Now and 30 Most Important AI Stocks According to BlackRock. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Trade Arabia
02-06-2025
- Business
- Trade Arabia
Terex brand launches new conveyor range to serve smaller operations
ProStack, a leading provider of bulk material handling solutions, has unveiled its new range of tracked conveyors designed specifically for small to medium-sized operations. These models will offer a shorter conveyor length than the existing ProStack range, delivering greater choice without compromising on performance, said ProStack in a statement. Headquartered in Londonderry, United Kingdom, ProStack is a brand of Terex Corporation, the global manufacturer of materials processing machinery. Unveiling the new models, ProStack said the latest additions include the TC 50, TC 60, and TR 60 - tracked conveyors measuring 50ft (15m) and 60ft (18m), including a radial option. These models are engineered for efficient stockpiling and are ideal for operations where space, mobility, or budget constraints are key considerations. "This new range allows us to fill a gap in our portfolio with conveyors that are better suited to smaller-scale operations," remarked Neil Robinson, the Business Line Director at ProStack. "They're compact, competitively priced, and tailored to meet the needs of a wider customer base," he stated. The new conveyors complement the broader ProStack lineup, which includes tracked feeders, bulk reception feeders, port hoppers, and telescopic conveyors. With this launch, ProStack continues to expand its offering to meet evolving customer demands, he added. -TradeArabia News Service
Yahoo
18-05-2025
- Business
- Yahoo
Terex (NYSE:TEX) Is Paying Out A Dividend Of $0.17
Terex Corporation (NYSE:TEX) has announced that it will pay a dividend of $0.17 per share on the 20th of June. Based on this payment, the dividend yield will be 1.4%, which is fairly typical for the industry. We've found 21 US stocks that are forecast to pay a dividend yield of over 6% next year. See the full list for free. Unless the payments are sustainable, the dividend yield doesn't mean too much. However, Terex's earnings easily cover the dividend. As a result, a large proportion of what it earned was being reinvested back into the business. Over the next year, EPS is forecast to expand by 57.4%. If the dividend continues along recent trends, we estimate the payout ratio will be 13%, which is in the range that makes us comfortable with the sustainability of the dividend. Check out our latest analysis for Terex While the company has been paying a dividend for a long time, it has cut the dividend at least once in the last 10 years. The annual payment during the last 10 years was $0.20 in 2015, and the most recent fiscal year payment was $0.68. This works out to be a compound annual growth rate (CAGR) of approximately 13% a year over that time. Despite the rapid growth in the dividend over the past number of years, we have seen the payments go down the past as well, so that makes us cautious. Growing earnings per share could be a mitigating factor when considering the past fluctuations in the dividend. We are encouraged to see that Terex has grown earnings per share at 16% per year over the past five years. Terex definitely has the potential to grow its dividend in the future with earnings on an uptrend and a low payout ratio. Overall, we like to see the dividend staying consistent, and we think Terex might even raise payments in the future. Earnings are easily covering distributions, and the company is generating plenty of cash. Taking this all into consideration, this looks like it could be a good dividend opportunity. Companies possessing a stable dividend policy will likely enjoy greater investor interest than those suffering from a more inconsistent approach. However, there are other things to consider for investors when analysing stock performance. To that end, Terex has 2 warning signs (and 1 which is potentially serious) we think you should know about. If you are a dividend investor, you might also want to look at our curated list of high yield dividend stocks. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
