Jefferies downgraded Terex Corporation TEX to Hold from Buy, saying shares have achieved its $25 price target and further upside would require more aggressive restructuring.
The brokerage said Terex now trades in the middle of its historical valuation range (EV/Sales) and at the upper end of the P/E range.
"[W]e see limited earnings growth or multiple expansion above our current estimates in the near-term," analyst Stephen Volkmann wrote in a note.
Meanwhile, the company revised its 2016 guidance to account for MHPS being moved to discontinued operations. The 2016 guidance now calls for revenues of $4.3-$4.5 billion and EPS of $0.85-$1.15. The analyst cut his 2016 EPS estimate to $1.10 from $1.36 and revenue view to $4.44 billion from $5.925 billion.
The sale of MHPS to Konecranes, which is currently going through the regulatory hurdles, should reach a shareholder vote (Konecranes) in September. The deal is expected to close in early 2017.
"Our $25 target is reflective of an EV/Sales multiple of 80% on 2017E. The sales of MHPS and portions of the Construction business should be accretive and allow significant deleveraging opportunities," Volkmann added.
Shares of Terex closed Monday's regular session at $24.45.
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