Terex (TEX) Stock Upgraded to 'Outperform' at Baird
NEW YORK (TheStreet) -- Terex (TEX) - Get Report stock closed down 0.52% to $24.81 in Tuesday's trading session despite a ratings upgrade to "outperform" from "neutral" at Baird earlier today.
The firm increased its price target to $30 from $24 on the stock.
Terex announced yesterday that Finland's Konecranes will buy the company's crane business for ports and factories for 1.13 billion euros ($1.28 billion) in cash and shares, which Baird views as "a positive catalyst," Barron's reports.
"Shareholders got an attractive multiple for what historically has been a challenged business with further upside possible given 25% equity ownership in Konecranes," the firm explained.
Baird also pointed to a lower execution risk as the new CEO can focus on operational improvement without needing to integrate its businesses with Konecranes.
The sale makes it easier for rivalZoomlion Heavy Industries Science & Technology to acquire the company, the firm pointed out. The remaining businesses fit better with Zoomlion's existing portfolio, the funding hurdle to acquire Terex has been lowered, and many of the Committee on Foreign Investment in the United States (CFIUS) issues revolve around national security concerns tied to the nation's ports, which are no longer a concern.
Separately, TheStreet Ratings team rates the stock as a "hold" with a ratings score of C.
Terex's strengths such as its solid financial position based on a variety of debt and liquidity measures that we have evaluated are countered by weaknesses including deteriorating net income, disappointing return on equity and poor profit margins.
You can view the full analysis from the report here: TEX
TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this article's author.
