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Terex Corp TEX

Rating as of

Morningstar’s Analysis

Valuation
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1-Star Price

PREMIUM

5-Star Price

PREMIUM

Economic Moat

PREMIUM

Capital Allocation

PREMIUM

We Expect 2021 Will Be a Rebound Year for Terex; Fair Value Estimate Raised to $25 Per Share

Analyst Note

| Brian Bernard, CFA, CPA |

2020 has been a tough year for no-moat rated Terex as sales and profitability have slumped significantly amid a pandemic-induced global recession. While the firm is by no means out of the woods yet, especially considering the resurgence of the virus, signs of stabilization have emerged. For example, the firm's backlog stabilized at about $770 million at the end of third-quarter 2020 after two consecutive quarters of sequential declines. Third-quarter customer bookings for Terex's aerial work platforms and materials processing segments also rebounded both sequentially and year over year with no material cancelations or deferrals. Overall, Terex's backlog was only down 5% year over year as it entered the fourth quarter. While we expect Terex's sales will rebound in 2021, we think it will take a few years to return to 2019 levels.

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Company Profile

Business Description

Based in Westport, Connecticut, Terex is a global manufacturer of cranes, materials processing equipment, and aerial work platforms. Its current composition is a result of numerous acquisitions over several decades and a recent shift in focus to its two core segments, after divesting of a handful of underperforming businesses. These remaining segments see heavy demand in nonresidential construction as well as in maintenance, manufacturing, energy, and materials management. North America is its largest market, accounting for 57% of revenue, whereas Western Europe accounts for 22%; Asia-Pacific, 14%; and the rest of world, 7%.

Contact
200 Nyala Farm Road
Westport, CT, 06880
T +1 203 222-7170
Sector Industrials
Industry Farm & Heavy Construction Machinery
Most Recent Earnings Sep 30, 2020
Fiscal Year End Dec 31, 2020
Stock Type Cyclical
Employees 9,500

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