Goldman Sachs has upgraded Terex Corporation from Neutral to Buy, with a new price target of $60. This reflects renewed confidence in Terex’s operations, driven by visible signs of recovery and strategic execution.
🛠 Aerial Work Platforms (AWP) Recovery: Terex’s AWP segment is stabilizing after earlier production cuts. The book-to-bill ratio is now 15% above the norm, indicating a healthier demand environment and improved order flow.
📉 Inventory Realignment: Used equipment inventory levels have dropped since December 2022, suggesting better supply-demand alignment and potential pricing power going forward.
🌎 Strategic Diversification: The acquisition of Environmental Services Group, now contributing 25–30% of overall profits, enhances earnings stability and cushions against industry cyclicality.
⚙ Tariff Exposure Priced In: Goldman has accounted for potential impacts from tariffs—especially concerning Terex’s Mexico operations—estimating a manageable $0.50 per share risk.
Dividend Fundamentals:
📈 Dividend Yield: Currently offers a 1.52% yield with an annual payout of $0.68 per share.
💰 Payout Ratio: Maintains a conservative payout ratio of 18.51%, ensuring dividend sustainability.
📅 Growth Track Record: Terex has grown its dividend steadily over the past four years, reinforcing its shareholder-friendly stance.
Terex’s operational agility and diversified earnings structure underpin the bullish outlook, combining solid fundamentals with consistent dividend returns.