Terex’s fourth quarter saw a strong positive market reaction, with management crediting the recently-closed merger with REV Group and robust segment execution as key drivers. CEO Simon Meester highlighted the immediate value from the ESG acquisition and early synergy capture, particularly as specialty vehicles and environmental solutions showed momentum. The company’s operational improvements, including increased manufacturing throughput and integration of REV’s backlog, were emphasized as supporting factors. Management also pointed to improved margins in environmental solutions and materials processing, while acknowledging that tariff headwinds persist in aerials. "We now have significant scale in specialty vehicles that share similar operational and go-to-market characteristics," Meester noted, describing the combination as a major milestone for the business.
Is now the time to buy TEX? Find out in our full research report (it’s free for active Edge members).
Terex (TEX) Q4 CY2025 Highlights:
- Revenue: $1.32 billion vs analyst estimates of $1.31 billion (6.2% year-on-year growth, 0.8% beat)
- EPS (GAAP): $0.95 vs analyst expectations of $1.00 (4.6% miss)
- Adjusted EBITDA: $138.7 million vs analyst estimates of $176 million (10.5% margin, 21.2% miss)
- EPS (GAAP) guidance for the upcoming financial year 2026 is $4.75 at the midpoint, missing analyst estimates by 14.7%
- EBITDA guidance for the upcoming financial year 2026 is $965 million at the midpoint, above analyst estimates of $710.8 million
- Operating Margin: 10.4%, up from 4.3% in the same quarter last year
- Market Capitalization: $7.90 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From Terex’s Q4 Earnings Call
- Timothy W. Thein (Raymond James): Asked about margin drivers in materials processing and the interplay between tariffs and pricing in aerials. CFO Jennifer Kong-Picarello explained margin gains were driven by price and productivity, with tariff headwinds in aerials expected to be offset by cost actions, resulting in flat margins for 2026.
- Jerry Revich (Wells Fargo): Inquired about the REV integration plan and order cadence in specialty vehicles. CEO Simon Meester described the focus on throughput to burn down the two-year backlog, emphasizing operational momentum and price-volume mix as key to margin improvement.
- Angel Castillo (Morgan Stanley): Questioned aerials bookings strength and demand trends. Meester noted strong replacement demand from major rental customers and mega projects, but no meaningful recovery from independents is assumed in the 2026 outlook.
- Jamie Cook (Truist Securities): Sought clarity on the conservatism in specialty vehicles guidance and the outlook for an aerials business sale. Meester stated guidance is based on maintaining operational momentum, while the aerials review is ongoing amid strong inbound interest.
- David Michael Raso (Evercore ISI): Asked about the use of potential aerials sale proceeds. Kong-Picarello said proceeds could be used for debt reduction, share buybacks, or reinvestment, but immediate focus is on integration and execution.
Catalysts in Upcoming Quarters
Going forward, the StockStory team will be watching (1) progress on REV integration and realization of cost synergies, (2) whether environmental solutions and specialty vehicles can ramp production to meet robust backlog and utility demand, and (3) developments surrounding the strategic review and potential divestiture of the aerials business. Execution on capacity expansion and margin improvements in core segments will also be important indicators of sustained performance.
Terex currently trades at $69.29, up from $59.26 just before the earnings. At this price, is it a buy or sell? The answer lies in our full research report (it’s free).
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