Latest news with #Terex
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
27-05-2025
- Business
- Yahoo
Bark, Matthews, Terex, Alta, and Montrose Stocks Trade Up, What You Need To Know
A number of stocks jumped in the afternoon session after the major indices rebounded (Nasdaq +2.0%, S&P 500 +1.5%) as President Trump postponed the planned 50% tariff on European Union imports, shifting the start date to July 9, 2025. Companies with substantial business ties to Europe likely had some relief as the delay reduced near-term cost pressures and preserved cross-border demand. The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Among others, the following stocks were impacted: Toys and Electronics company Bark (NYSE:BARK) jumped 7.4%. Is now the time to buy Bark? Access our full analysis report here, it's free. Specialized Consumer Services company Matthews (NASDAQ:MATW) jumped 5.7%. Is now the time to buy Matthews? Access our full analysis report here, it's free. Construction Machinery company Terex (NYSE:TEX) jumped 5.6%. Is now the time to buy Terex? Access our full analysis report here, it's free. Specialty Equipment Distributors company Alta (NYSE:ALTG) jumped 6.6%. Is now the time to buy Alta? Access our full analysis report here, it's free. Waste Management company Montrose (NYSE:MEG) jumped 5.5%. Is now the time to buy Montrose? Access our full analysis report here, it's free. Bark's shares are extremely volatile and have had 43 moves greater than 5% over the last year. In that context, today's move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business. The biggest move we wrote about over the last year was 12 months ago when the stock dropped 20.4% on the news that the company reported weak first-quarter 2024 results and provided weak guidance. Specifically, revenue and adjusted EBITDA guidance for the upcoming quarter and the full year came in below expectations. Revenue was also underwhelming during the quarter, down 3.6% year on year. The weakness was attributed to "fewer total orders in the most recent period, largely related to the Company carrying fewer BarkBox and Super Chewer subscriptions into the quarter." The weakness mostly affected the Direct to Consumer (DTC) segment. On the other hand, Commerce revenue rose 20.9% year-over-year. Overall, this was a weaker quarter for BARK. Bark is down 31.2% since the beginning of the year, and at $1.30 per share, it is trading 45.8% below its 52-week high of $2.40 from December 2024. Investors who bought $1,000 worth of Bark's shares at the IPO in December 2020 would now be looking at an investment worth $104.84. Here at StockStory, we certainly understand the potential of thematic investing. Diverse winners from Microsoft (MSFT) to Alphabet (GOOG), Coca-Cola (KO) to Monster Beverage (MNST) could all have been identified as promising growth stories with a megatrend driving the growth. So, in that spirit, we've identified a relatively under-the-radar profitable growth stock benefiting from the rise of AI, available to you FREE via this link.
Yahoo
27-05-2025
- Business
- Yahoo
Bark, Matthews, Terex, Alta, and Montrose Stocks Trade Up, What You Need To Know
A number of stocks jumped in the afternoon session after the major indices rebounded (Nasdaq +2.0%, S&P 500 +1.5%) as President Trump postponed the planned 50% tariff on European Union imports, shifting the start date to July 9, 2025. Companies with substantial business ties to Europe likely had some relief as the delay reduced near-term cost pressures and preserved cross-border demand. The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Among others, the following stocks were impacted: Toys and Electronics company Bark (NYSE:BARK) jumped 7.4%. Is now the time to buy Bark? Access our full analysis report here, it's free. Specialized Consumer Services company Matthews (NASDAQ:MATW) jumped 5.7%. Is now the time to buy Matthews? Access our full analysis report here, it's free. Construction Machinery company Terex (NYSE:TEX) jumped 5.6%. Is now the time to buy Terex? Access our full analysis report here, it's free. Specialty Equipment Distributors company Alta (NYSE:ALTG) jumped 6.6%. Is now the time to buy Alta? Access our full analysis report here, it's free. Waste Management company Montrose (NYSE:MEG) jumped 5.5%. Is now the time to buy Montrose? Access our full analysis report here, it's free. Bark's shares are extremely volatile and have had 43 moves greater than 5% over the last year. In that context, today's move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business. The biggest move we wrote about over the last year was 12 months ago when the stock dropped 20.4% on the news that the company reported weak first-quarter 2024 results and provided weak guidance. Specifically, revenue and adjusted EBITDA guidance for the upcoming quarter and the full year came in below expectations. Revenue was also underwhelming during the quarter, down 3.6% year on year. The weakness was attributed to "fewer total orders in the most recent period, largely related to the Company carrying fewer BarkBox and Super Chewer subscriptions into the quarter." The weakness mostly affected the Direct to Consumer (DTC) segment. On the other hand, Commerce revenue rose 20.9% year-over-year. Overall, this was a weaker quarter for BARK. Bark is down 31.2% since the beginning of the year, and at $1.30 per share, it is trading 45.8% below its 52-week high of $2.40 from December 2024. Investors who bought $1,000 worth of Bark's shares at the IPO in December 2020 would now be looking at an investment worth $104.84. Here at StockStory, we certainly understand the potential of thematic investing. Diverse winners from Microsoft (MSFT) to Alphabet (GOOG), Coca-Cola (KO) to Monster Beverage (MNST) could all have been identified as promising growth stories with a megatrend driving the growth. So, in that spirit, we've identified a relatively under-the-radar profitable growth stock benefiting from the rise of AI, available to you FREE via this link. 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
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
Yahoo
16-05-2025
- Business
- Yahoo
TEX Q1 Earnings Call: Environmental Solutions Segment Drives Guidance Amid Tariff Headwinds
Lifting and material handling equipment company Terex (NYSE:TEX) fell short of the market's revenue expectations in Q1 CY2025, with sales falling 4.9% year on year to $1.23 billion. On the other hand, the company's full-year revenue guidance of $5.4 billion at the midpoint came in 2.2% above analysts' estimates. Its GAAP profit of $0.31 per share was 28.8% below analysts' consensus estimates. Is now the time to buy TEX? Find out in our full research report (it's free). Revenue: $1.23 billion vs analyst estimates of $1.25 billion (4.9% year-on-year decline, 1.3% miss) EPS (GAAP): $0.31 vs analyst expectations of $0.44 (28.8% miss) Adjusted EBITDA: $128 million vs analyst estimates of $110.4 million (10.4% margin, 15.9% beat) The company reconfirmed its revenue guidance for the full year of $5.4 billion at the midpoint EPS (GAAP) guidance for the full year is $4.90 at the midpoint, beating analyst estimates by 15.8% EBITDA guidance for the full year is $660 million at the midpoint, above analyst estimates of $628.7 million Operating Margin: 5.6%, down from 12.2% in the same quarter last year Free Cash Flow was -$57 million compared to -$68.9 million in the same quarter last year Organic Revenue fell 18.7% year on year (4.4% in the same quarter last year) Market Capitalization: $3.08 billion Terex's first quarter results were shaped by a combination of operational adjustments and ongoing market uncertainty. Management cited the impact of production cuts in its Aerials and Materials Processing (MP) segments, which were implemented to manage inventory and rebalance supply with demand. CEO Simon Meester highlighted that these actions impacted margins during the quarter but are now largely behind the company, with expectations for improvement in subsequent periods. The Environmental Solutions (ES) segment, particularly the recently integrated ESG business, delivered notable performance, accounting for a third of global sales and achieving high operating margins. Looking ahead, the company's forward guidance is influenced by its ability to mitigate tariff-related cost pressures, leverage its U.S.-centric manufacturing footprint, and realize operational synergies from the ESG acquisition. Management reaffirmed its revenue and earnings outlook for the year, pointing to strong backlog, ongoing cost controls, and a cautious approach to external uncertainties such as tariffs and macroeconomic volatility. CFO Jennifer Kong emphasized the expectation for improved free cash flow and operating margins as the year progresses, supported by continued integration benefits and operational efficiency gains. Management's commentary focused on the operational levers and market dynamics affecting segment performance, as well as the progress of integration efforts within Environmental Solutions. Key drivers of the quarter's financial performance included shifts in production, cost mitigation strategies, and evolving demand patterns across end markets. Production Cuts and Inventory Rebalancing: The Aerials and MP segments experienced reduced production volumes to align inventory with current demand, leading to under-absorption of fixed costs and temporary margin pressure. Management expects these effects to diminish, supporting margin recovery in future quarters. Environmental Solutions Outperformance: The ES segment, bolstered by the ESG acquisition, contributed about one-third of total sales and achieved a 19.4% operating margin. The segment benefited from record throughput and early realization of integration synergies, though management expects margins to moderate slightly in coming quarters. Tariff Mitigation Efforts: The company has been proactive in managing the impact of new tariffs by securing inventory early, adjusting its supply chain, and leveraging its U.S. manufacturing footprint. Approximately 75% of U.S. machine sales are sourced domestically, helping buffer the effect of trade policy shifts. End Market Shifts: Waste and recycling, infrastructure, and utilities now represent more than half of total revenue, making Terex less exposed to cyclical swings in general construction. Publicly funded infrastructure demand remains healthy, while private sector construction is described as cautious. Synergy Realization and Cost Controls: Integration of ESG is expected to deliver over $25 million in operational run-rate synergies by the end of 2026. The company also reported ongoing SG&A reductions and operational efficiency measures, which partially offset margin headwinds from volume declines. Management's outlook for the upcoming quarters is shaped by efforts to navigate tariff-related costs, realize integration benefits, and manage demand across resilient end markets. The company's ability to sustain margins and cash flow will depend on these ongoing initiatives. Tariff and Supply Chain Management: The company is focused on mitigating tariff impacts through supply chain adjustments, leveraging USMCA trade agreements, and maintaining price/cost neutrality. Management expects these actions to limit cost inflation's effect on margins. ESG Integration and Synergy Capture: Continued integration of the ESG acquisition is expected to drive operational synergies, particularly in Environmental Solutions. Management anticipates these benefits will support margin improvement and segment growth over the next 18 months. End Market Demand and Backlog: Stable demand in waste, recycling, infrastructure, and utilities is expected to underpin revenue, while cautious private construction and European uncertainty remain risks. A strong backlog in key segments supports management's confidence in the sales outlook. Jerry Revich (Goldman Sachs): Asked about the sustainability of ES segment margins; management attributed Q1's strong performance to record throughput and early synergies, but expects margins to moderate as one-off benefits fade and investments ramp up. Jamie Cook (Truist Securities): Inquired about the effect of tariffs and whether Terex's U.S. manufacturing provided a competitive advantage; management confirmed domestic production helps buffer tariff exposure, especially in Environmental Solutions and Aerials. David Raso (Evercore ISI): Sought clarity on sequential margin recovery in Aerials; management pointed to normalization of production volumes and reduced under-absorption as key drivers for expected return to double-digit margins in Q2. Mig Dobre (Baird): Questioned the impact of reciprocal tariffs on UK-sourced products in MP; management explained that mitigation strategies are in place, and pricing actions are considered based on segment exposure and competitive context. Angel Castillo (Morgan Stanley): Asked about drivers behind the improvement in MP backlog and whether it signals a bottom; management cited normalized dealer inventories and healthy North American fleet utilization, though uncertainty from tariffs remains a cautionary factor. In the coming quarters, the StockStory team will be monitoring (1) the pace of margin recovery in the Aerials and MP segments as production normalizes, (2) the realization of operational synergies and sustained performance in Environmental Solutions following the ESG integration, and (3) the company's effectiveness in mitigating tariff-related costs through supply chain and pricing actions. Additionally, the trajectory of backlog conversion and demand in key U.S. and international markets will serve as important indicators of execution. Terex currently trades at a forward P/E ratio of 9.6×. At this valuation, is it a buy or sell post earnings? Find out in our free research report. Market indices reached historic highs following Donald Trump's presidential victory in November 2024, but the outlook for 2025 is clouded by new trade policies that could impact business confidence and growth. While this has caused many investors to adopt a "fearful" wait-and-see approach, we're leaning into our best ideas that can grow regardless of the political or macroeconomic climate. Take advantage of Mr. Market by checking out our Top 5 Growth Stocks for this month. This is a curated list of our High Quality stocks that have generated a market-beating return of 176% over the last five years. Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-micro-cap company Kadant (+351% five-year return). Find your next big winner with StockStory today.
