Terex (TEX) Estimates Cut on Supplier Bottlenecks - Jefferies

Jefferies analyst Stephen Volkmann reiterated a Buy rating and $60.00 price target on Terex (NYSE: TEX) while cutting near-term EPS estimates to account for a greater-than-anticipated impact from supply chain bottlenecks and inefficiencies. Demand remains robust and a significant AWP replacement cycle is likely leaving the longer term investment thesis intact. While EPS was cut, the PT remains unchanged.

The analyst stated "Like much of our coverage, Terex is battling supplier bottlenecks, which, based on channel checks, have gotten worse in the 3Q. The good news is this should be temporary as demand continues to be strong, and we
anticipate continued backlog growth. The bad news is the near-term impact is slightly lower sales and margin due to productivity and price/cost headwinds." "Our 2021E comes down ~12% from $3.30 to $2.90 with most of the reduction in the 3Q ($0.35) vs. 4Q ($0.05). Our 2022E comes down $0.10 as we expect lingering supplier issues in the 1Q are likely. Our model now assumes slightly lower revenues, but we believe margins will also be impacted by inefficiencies as production is interrupted with machines moving in and out of "the hospital" as they await various parts."

For an analyst ratings summary and ratings history on Terex click here. For more ratings news on Terex click here.

Shares of Terex closed at $44.79 yesterday.

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