Terex Earnings: Strong Demand and Improved Supply Chains Push Management To Raise 2023 Guidance

The key takeaway coming out of Terex’s second-quarter earnings was the company’s confidence in near-term demand. Management raised 2023 guidance for both sales and margins. Sales guidance came in above the top end of previous estimates for aerial work platforms and at the top end for materials processing. The biggest surprise was operating margin guidance. At the consolidated level, the company is now expecting operating margins in 2023 to land near 13%, up from 11.4%-11.8% previously. A lot of that is being driven by the aerial work platform segment, where operating margin guidance was raised to 13.8% from 11.5% in the first quarter. Terex’s guidance led us to raise our fair value estimate to $51 from $48.50 previously. We’re now expecting strong sales and margin performance in 2023.