There is no way to spin the Terex (NYSE:TEX): In the short term they're a mess, as the recent quarterly results and resultant downgrade from Standpoint Research points to.
Standpoint downgraded the equipment maker from "Buy" to "Sell."
"Terex shares were nearing a two-year high before the (lack of) earnings announcement this morning. The shares are down 4% in light pre-market trading. Although the shares are trading at low multiples on earnings from 2005 (10X), 2006 (6X), 2007 (4X) and 2008 (4X), the company is not profitable at this time and it may take a couple of years before they match the $2.43 figure from 2005. We will not see them match the numbers from 2006 ($4.05), 2007 ($5.93) or 2008 ($5.64) any time soon. This was a $90 stock three years ago, but in my opinion it may take two years before we see the share price back at $30 … and we may very well break $20 to the downside before then. There are better risk-reward situations in the sector at this time. TEX has disappointed repeatedly in recent years and the announcement today was no exception. Annual revenues are now down below $5 bln … that is more than 50% off the $10 bln sales figure posted just two years ago," said Standpoint.
Terex lost $89.2 million in the quarter, dropping to $0.82 a share. Analysts had been looking for a loss of $0.15, to show how badly they missed.
There is nothing much short term to be excited about with Terex. But when measured against rivals Deere (NYSE:DE), CNH Global (NYSE:CNH) and Caterpillar (NYSE:CAT), they will trade at even a larger discount than before, offering a possible lucrative buying opportunity for the long term.
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