TEX
Terex Corporation
$65.39
Cyclical & Capital-Intensive
80%
Normalized Earnings × Cycle Multiple
Moderate
·
Conviction
Undervalued
Trading 26.0% below fair value
You pay
$65.39
Bear
$71.49
Fair
$88.32
Bull
$105.14
Bear
$71.49
+9.3%
$4.32 × 20x + net cash
Fair
$88.32
+35.1%
$4.32 × 24x + net cash
Bull
$105.14
+60.8%
$4.32 × 28x + net cash
Key Value Driver
Through-cycle normalized EPS ($4.32)
Implied Market Multiple
15.1x
Summary
Our base-case estimate uses Normalized Earnings × Cycle Multiple. We then blend that result with the average analyst price target of $82.71 from 31 analysts, using a 30% weight on analyst consensus. That produces an estimated intrinsic value of $88.32 per share.
Warnings
This company has a built-in lending arm whose debt is mixed in with the main business. We capped the debt adjustment to avoid overstating what the core business owes.
Key Risks
- Standard 10-year DCF produces unreliable terminal values for cyclicals
- 'Cheap' P/E at cycle peak is the most common value trap — normalize first
- Captive finance subsidiaries have different risk profiles from manufacturing