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 (NYSE: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...
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