Goldman Sachs Upgrades Terex to Buy, Sees Earnings Bottoming and Cyclical Upside Ahead

Goldman Sachs upgraded Terex (NYSE:TEX) from Neutral to Buy and raised its price target to $60 from $45, citing signs of earnings stabilization and improved visibility across key segments.

The firm sees the Aerial Work Platforms segment as having likely bottomed in Q1, supported by a 30% production cut and a notable year-over-year decline in used inventory levels—the first such drop since late 2022. This signals easing supply pressures and a potential recovery in demand dynamics.

Goldman also noted that tariff-related headwinds, which have weighed on sentiment, are now broadly reflected in consensus estimates. Meanwhile, the company's earnings mix has become more balanced thanks to the Environmental Services Group acquisition, which now contributes 25%–30% of total profits—dampening Terex's traditional cyclicality.

While tariffs tied to Terex’s Mexico-based manufacturing under USMCA remain a risk, the firm estimates the potential impact at around $0.50 per share, a manageable headwind in the broader context of improving fundamentals.

With earnings likely at an inflection point and downside risk already priced in, Goldman sees room for multiple expansion and improved investor sentiment.