Seeking Alpha: Okay Results From Terex Don't Fit Wall Street's Story

Wall Street seems to really want to believe that 2014 will be a very good year for companies exposed to non-residential construction, even though comments from company managements don't seem quite as optimistic. That is coming home to roost for Terex (TEX) on Wednesday, as the shares are getting hit relatively hard on what didn't really look like a bad quarter or guide.

I like Terex's focus on improving margins and full-cycle, and I also like the company's leverage to an improving European economy. Valuation is a more complicated matter. While I think Terex can ride a recovery in non-residential construction to high single-digit FCF margins over the next five years, I don't see the shares as cheap on a long-term intrinsic value basis. On the other hand, cyclical stocks tend to overshoot during recoveries and investors can look at metrics like EV/EBTIDA as validation for further upside in these shares.

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Okay Results From Terex Don't Fit Wall Street's Story