Terex Shares Fall on Valuation Worries

Shares of Terex Tumble After Analyst Downgrades Citing Recent Run Up

NEW YORK (AP) -- Shares of Terex Corp. tumbled Tuesday on analyst comments that other heavy equipment companies offer better potential near-term returns for investors.

Terex shares shed $1.84, or 2.7 percent, to close at $66, after dropping as low as $64.27 earlier in the day. Over the past 52 weeks, the company's shares have traded between $46.50 and $96.94.

Terry Darling of Goldman Sachs cut his rating for Terex to "Neutral" from "Buy," citing its recent run up in share price and close proximity to his $70 price target.

"We remain positive on Terex' longer-term growth opportunities, potential internal efficiencies, strong balance sheet and high exposure to rising infrastructure spending," Darling wrote in a note to investors.

"However, shares have recovered (up 12 percent since Feb. 1) from an oversold position on solid fourth-quarter earnings per share and 2008 guidance."

Darling said he prefers the commodity exposure of Buy-rated CNH Global NV and Deere & Co., both farm equipment companies, and mining equipment maker Bucyrus International Inc.

The analyst also on Tuesday upgraded electrical components maker Eaton Corp. to "Conviction Buy" from "Neutral," saying its share have the potential to grow and it could be a defensive stock in the current economic environment.

Eaton shares slipped 5 cents to $82.06.