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.