On Monday, Baird raised the price target for Terex Corporation (NYSE:TEX), a global manufacturer of lifting and material processing products, to $58 from the previous target of $54, while maintaining a Neutral rating on the stock.
The adjustment follows Terex's first-quarter financial performance, which surpassed consensus expectations. The company's sales, operating income, and earnings per share (EPS) for the first quarter of 2024 were bolstered by a 13% year-over-year increase in Aerial Work Platforms (AWP) sales, attributed to enhanced factory throughput.
Despite the positive developments in AWP, the Materials Processing (MP) segment experienced a decline, with sales dropping 6% year-over-year due to weaker demand in Europe. The company's consolidated orders saw a significant reduction, down 21% year-over-year, marking one of the softest first-quarter order periods in several years. The backlog also decreased by 24% from the first quarter of 2023 peak.
In light of the first-quarter results, Terex has adjusted its 2024 EPS guidance, raising the midpoint by $0.10, which represents a 1.4% increase. This revision is based on slightly improved projections for the AWP segment.
Despite the upward revision in the EPS guidance and the strong performance in the AWP sector, concerns remain about the potential impact of declining orders and backlog on the company's future earnings, particularly for the MP segment in the second half of the year and AWP going into 2025.
InvestingPro Insights
Following Baird's updated price target for Terex Corporation, InvestingPro data shows promising financial health and market performance for the company. With a market capitalization of $4.01 billion and a low P/E ratio of 7.88, which adjusts slightly to 7.81 for the last twelve months as of Q1 2024, Terex appears to be trading at an attractive earnings multiple. The company's revenue growth has been solid, with an 11.98% increase over the last twelve months as of Q1 2024, and a quarterly growth of 4.6% in Q1 2024. This growth is supported by a robust gross profit margin of 22.95% and an operating income margin of 12.3% for the same period.
In line with the article's mention of Terex's EPS guidance adjustment, an InvestingPro Tip highlights that analysts predict the company will be profitable this year, which is corroborated by a profitable performance over the last twelve months. Moreover, Terex has demonstrated a strong commitment to returning value to shareholders, having raised its dividend for 3 consecutive years and maintaining dividend payments for 12 consecutive years, with a recent dividend growth of 13.33%. The company's stock has also seen a large price uptick over the last six months, with a 36.91% total return, indicating investor confidence.
To gain deeper insights and access to additional InvestingPro Tips for Terex Corporation, interested readers can visit https://www.investing.com/pro/TEX. There are currently 11 more tips available, which can further inform investment decisions. For those considering an InvestingPro subscription, use the coupon code PRONEWS24 to receive an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
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