Seeking Alpha

J.P. Morgan sees downside risk for Joy Global

  • J.P. Morgan remains bearish on coal and iron ore, which does not bode well for Joy Global (JOY +0.2%), even as shares rise slightly following upbeat manufacturing data early this morning out of China.
  • Caterpillar’s (CAT +0.5%) mining business already has fallen from a peak of $21.2B to ~$10.3B whereas JOY’s combined businesses have fallen 32% with its OE business down 57% and its service business down 7% from the peak, the firm says.
  • Lack of visibility makes the question of whether JOY’s revenue has further to fall a tough call, but J.P. Morgan thinks deteriorating U.S. thermal coal conditions skew the risk to the downside.
Comments (2)
  • beinnow
    , contributor
    Comments (23) | Send Message
     
    Sometimes you get the feeling that the banks are trying to depress the sector with all their damanging reports about future development of prices etc.
    2 Jul 2014, 01:51 AM Reply Like
  • BGDD
    , contributor
    Comments (317) | Send Message
     
    It's a cyclical business, and it's the low side of the cycle. The analyst has a short horizon, that's their job description.
    2 Jul 2014, 11:11 AM Reply Like
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