We came across a bullish thesis on Terex Corporation on Value Don’t Lie’s Substack. In this article, we will summarize the bull’s thesis on TEX. Terex Corporation’s share was trading at $45.39 as of 19th June. TEX’s trailing and forward P/E ratios were 12.37 and 9.35, respectively, according to Yahoo Finance.
A large construction project with cranes and forklifts in action, demonstrating the company’s building materials business.
Terex Corp (TEX), a capital goods manufacturer serving sectors like construction, utilities, mining, and waste management, trades at 9.4x earnings and 8x EBITDA levels that may reflect trough-year assumptions rather than long-term potential. Despite a flat share price since 2021, TEX’s core segments—Materials Processing (MP) and Aerial Work Platforms (AWP)—hold top market positions but are undergoing a cyclical correction following supernormal COVID-era demand.
Backlogs and earnings are reverting to 2018–2019 levels, suggesting a bottoming out in 2025. A transformative event for TEX was its $2 billion debt-funded acquisition of Dover’s Environmental Solutions Group (ESG) in late 2024. ESG is the market leader in refuse collection and compaction equipment and adds a higher-quality, less cyclical profile to the portfolio. With 20%+ EBITDA margins, consistent organic growth, and strong aftermarket and digital revenue streams, ESG provides a potential uplift to Terex’s overall business quality.
The acquisition is significant relative to TEX’s $3 billion market cap and could make or break shareholder returns over the next few years. For 2025, guidance implies $660 million EBITDA and $4.70–$5.10 EPS, while free cash flow is expected at $300–350 million, translating to a modest 9.4x P/E and FCF multiple, below the 10-year median of 11.2x.
Assuming 2025 marks a cyclical low and 2026 targets of $740 million EBITDA and $5.76 EPS are hit, shares could be worth $63–66 versus $46 today. While the risk/reward appears tilted favorably for a cyclical recovery, execution on ESG integration and macro timing remain critical for upside to materialize.
Previously, we covered a bullish thesis on Terex Corporation by Quick Value in June 2025, which highlighted the company’s undervaluation, cyclical earnings trough, and the transformative ESG acquisition funded by debt. The company’s stock price has depreciated by approximately 0.2% since our coverage. This is because the thesis hasn’t played out yet due to soft macro conditions. Value Don’t Lie shares an identical view but emphasizes ESG integration as the key swing factor.
Terex Corporation is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 33 hedge fund portfolios held TEX at the end of the first quarter, which was 33 in the previous quarter. While we acknowledge the risk and potential of TEX as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an extremely cheap AI stock that is also a major beneficiary of Trump tariffs and onshoring, see our free report on the best short-term AI stock.
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