BUY OR SELL-After a week of good news, where is Terex headed?

* Terex shares up sharply over past three months

* Bulls like improved finances, recovering global economy

* Bears see continued end-market woes, inflated valuation

By James B. Kelleher

CHICAGO, May 29 (Reuters) - It's been a hectic week at Terex
Corp (TEX.N), the world's third-largest maker of construction,
mining and road-building equipment.

No, the company's factories, which have been operating well
below capacity for months now because of the global downturn,
did not suddenly start working three shifts again.

But executives at its Westport, Connecticut, headquarters
were busy. First, they reached a tentative $8 million deal to
settle civil fraud charges with U.S. regulators without
admitting or denying any wrongdoing.

Then, they successfully amended a key credit agreement and
raised $600 million -- moves that helped dispel concerns about
the company's ability to weather the current downturn without
tripping key debt covenants.

The removal of those uncertainties, and the notion that
extra cash might help Terex snap up bargains in the M&A market,
prompted at least one analyst to breathe a sigh of relief and
urge investors to buy Terex shares, which have doubled in value
in recent months but are still 80 percent below the 52-week high
they reached exactly one year ago.

But lots of analysts remain worried about the company's
prospects and wonder if the recent rally, which has Terex
trading at more than 50 times expected 2010 earnings, according
to Reuters Estimates, will be followed by a correction.

So what should investors do?

BUY

Steve Barger, an analyst at Keybanc Capital Markets, is
bullish on Terex with a "buy" rating on its stock.

Barger says this week's successful raising of capital
"should remove a significant overhang" of negative investor
expectations that surrounded the company. It also gives the
company cash to pay down a portion of its senior bank term loan
and revolver -- and gives it "ample flexibility to negotiate the
current downturn or execute on strategic alternatives, including
emerging market joint ventures or small acquisitions" like its
purchase, earlier this year, of Italy's Fantuzzi Industries.

Barger also expects commodity demand to pick up along with
the global economy, a development that would benefit mining
equipment companies like Terex.

SELL

Henry Kirn, an analyst at UBS, is less upbeat. He
downgraded Terex and four other machinery makers to "sell" this
week, warning the recent run-up in their share prices suggested
investors were seeing Ben Bernanke's so-called green shoots of
economic recovery "before they have sprouted."

Even if the shares were not trading "above historical
valuation parameters," which Kirn believes they are, he worries
about continued weakness in key end markets, where customers are
still feeling the effects of the credit crunch. Throw in the
limited pricing power that Terex and others have because of all
the idle used equipment that is sitting around and Kirn says a
sell-off may be brewing.

Standard & Poor's is equally downbeat. Their analyst,
Mathew Christy, said this week that the share sale and other
actions at Terex signaled "continued deterioration" in its
results and reiterated his "sell" recommendation on its
shares.
(Reporting by James Kelleher, editing by Matthew Lewis)