TEX
Terex Corporation
$57.76
Cyclical & Capital-Intensive
80%
Normalized Earnings × Cycle Multiple
Moderate
·
Conviction
Undervalued
Trading 34.3% below fair value
You pay
$57.76
Bear
$71.16
Fair
$87.90
Bull
$104.65
Bear
$71.16
+23.2%
$4.32 × 20x + net cash
Fair
$87.90
+52.2%
$4.32 × 24x + net cash
Bull
$104.65
+81.2%
$4.32 × 28x + net cash
Key Value Driver
Through-cycle normalized EPS ($4.32)
Implied Market Multiple
13.4x
Summary
Our base-case estimate uses Normalized Earnings × Cycle Multiple. We then blend that result with the average analyst price target of $81.33 from 31 analysts, using a 30% weight on analyst consensus. That produces an estimated intrinsic value of $87.90 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