Cat-astrophe? No, But There Is A Good Case Against Caterpillar Shares
DoctoRx • 48 Comments
DoctoRx • 48 Comments
Yesterday, 12:56 PM
- Caterpillar (CAT +1.8%) rises to a new 52-week high as it builds on yesterday's breakout momentum following OPEC's agreement to cut production.
- CAT has been one of many companies to suffer alongside commodities price, but as oil and gold have rebounded in 2016, so has mining supplier CAT, and the stock has surged more than 7% over the past two days.
- In addition to the commodity comeback, Longbow Research's Eli Lustgarten says CAT's 2016 surge is due to "accelerated restructuring as well as the company downsizing to a new reality."
- Deutsche Bank recently tabbed CAT as one of its top picks, believing that natural resource markets have bottomed, and CAT can grow earnings independent of volumes.
- Some technical analysts are getting excited too: Now that CAT has broken through the $84 level that Evercore ISI's Rich Ross said served as "resistance," he says the stock presents an attractive buying opportunity.
Wed, Sep. 21, 10:54 AM| Wed, Sep. 21, 10:54 AM | 11 Comments
Mon, Sep. 19, 7:48 AM
- Used machinery is flooding the secondhand market, piling more pain on equipment makers battling slack demand amid a global slump in the value of everything from coal to corn, WSJ reports.
- Dealers, in turn, are keeping smaller inventories of new wheel loaders, backhoes and other machinery. That is hurting sales for Caterpillar (NYSE:CAT), Volvo (OTCPK:VOLVY), Deere (NYSE:DE) and other manufacturers.
- Rental businesses account for half of new equipment sales in the U.S., and some analysts see that climbing to 60% within five years.
Wed, Sep. 7, 11:55 AM
- Oshkosh (OSK +0.9%) is initiated with a Buy rating and $62 price target at Deutsche Bank, which notes that the stock trades in-line with its machinery peer group despite the company’s superior growth profile.
- The firm says OSK has the strongest four-year outlook in its coverage universe, while estimating 6% revenue and 23% EPS compound annual growth rate during 2016-20, driven primarily by defense, where the company will benefit as Joint Light Tactical Vehicle shipments to the U.S. Defense Department ramp up.
- While the 2017-18 delivery schedule is well known, the firm feels that consensus is not adequately modeling the margin mix benefit for OSK.
- Deutsche Bank also started Caterpillar (CAT +1.6%) with a Buy rating.
Tue, Sep. 6, 5:53 PM
- Caterpillar (NYSE:CAT) is initiated with a Buy rating and a $98 price target at Deutsche Bank, which believes 2016 represents the cyclical trough for CAT's earnings.
- Deutsche Bank says 64% of CAT’s revenue is finally reaching bottom, as natural resource capex approaches cyclical lows; the firm says it does not anticipate a V-shaped recovery by any means, but does "see scope for a positive inflection" in mining, well servicing and Brazil construction in 2017.
- The firm says its 2017 EPS estimate of $4.03 sits 13% above consensus, as it thinks Wall Street is underestimating cost cutting benefits, noting that the cuts have been structural rather than temporary; even in an environment of modest volume growth, Deutsche Bank believes CAT can grow EPS 15% Y/Y.
Fri, Sep. 2, 6:25 AM
- Looking to shift production to other facilities as part of a restructuring program, Caterpillar (NYSE:CAT) may lay off about 2,000 employees at a plant in Gosselies, Belgium.
- The company said in September 2015 that it would cut as many as 10,000 jobs through 2018 and might close or consolidate more than 20 plants around the world as it grappled with a mining and energy downturn.
Mon, Aug. 29, 8:55 PM
- Ritchie Bros Auctioneers (NYSE:RBA) agrees to acquire IronPlanet, an online marketplace for used heavy equipment and other durable asset sales, for $758.5M.
- RBA says IronPlanet sold $787M of gross merchandise value through its sales channels during 2015, and tallied a 25.2% compounded growth rate in assets sold during 2013-15.
- RBA also announces a deal to partner with Caterpillar (NYSE:CAT) for live onsite and online auctions of CAT's used equipment, effective upon the closing of the IronPlanet acquisition, which is expected by H1 2017; CAT and its dealers own a minority stake in IronPlanet.
Thu, Aug. 18, 9:16 AM| Thu, Aug. 18, 9:16 AM | 6 Comments
Fri, Aug. 12, 3:43 AM
- Caterpillar (NYSE:CAT) expects no significant demand growth for its energy and transportation products for the rest of 2016 as oil prices stay weak, Caterpillar's Jim Umpleby told analysts.
- The world's largest manufacturer of heavy equipment is restructuring its businesses as demand has slowed for construction, mining, energy and transportation products since 2012.
- It has slashed 13,900 jobs worldwide since mid-2015, and said last month it planned more cuts.
Tue, Jul. 26, 6:25 PM
- Caterpillar (NYSE:CAT) popped more than 5% in today's trade en route to a 52-week high after reporting better than expected Q2 earnings and saying the worst of the slump in mining equipment sales may be passing.
- “The combination of extra cost reduction and a few more sales hopefully will make the second quarter the worst of the year,” CAT's VP of finance services Mike DeWalt said in today's earnings conference call. “Embedded within our outlook we see it getting a little bit better."
- “Management is very cautious overall but at the same time expressed optimism that they can contain losses” in the mining segment, Edward Jones analyst Matt Arnold tells Bloomberg.
- "We would qualify the tone as realistic vis-à-vis the macro environment with some slight positive incremental data points for the dealers on inquiries for rebuild activity [on the mining side]. On the oil side, CAT has not seen any improvements yet," says National Bank Financial’s Maxim Sytchev.
Tue, Jul. 26, 8:07 AM
- Q2 EPS excluding restructuring costs of $1.09 compares to $1.40 a year ago, on revenue of $10.3B vs. $12.3B a year earlier.
- "Over the past quarter, economic risks have persisted," CEO Doug Oberhelman said. "World economic growth remains subdued and is not sufficient to drive improvement in most of the industries and markets we serve."
- Guidance for 2016: Full-year earnings of $3.55 a share (vs. $3.70 previously), on revenue of $40B-$40.5B (vs. $40B-$42B). Restructuring costs are also expected to increase.
- CAT -1% premarket
- Q2 results
Tue, Jul. 26, 7:32 AM
Mon, Jul. 25, 5:30 PM
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Mon, Jul. 25, 10:15 AM| Mon, Jul. 25, 10:15 AM | 17 Comments
Thu, Jul. 21, 3:52 AM
- Looking to strengthen its core mining equipment unit, Japan's Komatsu (OTCPK:KMTUY) has agreed to buy Joy Global (NYSE:JOY) for $2.9B, amid a fight for market share with industry leader Caterpillar (NYSE:CAT).
- Under the terms of the agreement, Joy stakeholders will receive $28.30 in cash for each outstanding share of common stock held, representing a 20% premium to yesterday's closing price.
- JOY +20% premarket
Fri, Jul. 15, 10:18 AM
- BMO technical analyst Russ Visch likes the following stocks:
- MMM: breaks out of 2-yr range, new target $205.
- AYI: successfully tested breakout at $241 level, next target $313.
- CAT: “lots of positive developments” including beginnings of a bearish-to-bullish reversal; rally above $81 would signal uptrend resuming with target of $105.
- EMR: successful retest of recent breakout, rally above $56.75 would open new target of $65.50.
- GE: breaks out of triangle pattern, next target $37, implies nearly 15% gain.
- TYC: has to breakout above $44 resistance, that would open new target of $48.
- UNP: in bearish-to-bullish reversal, new long-term uptrend underway, next target $113, implies 23% gain.
- UPS: to challenge all-time high at $114.40, breakout would be “extremely bullish” with new target $140.
- Also likes: FAST, FLR, JEC, MAS, PH, UTX, VRSK