Thu, Sep. 22, 5:36 PM
Tue, Sep. 6, 12:38 PM
- News of a deep alliance between Navistar (NAV +43.4%) and Volkswagen is creating some disruption in the truck sector. Analysts think the $256M lifeline from Volkswagen changes the discussion on Navistar away from impending bankruptcy.
- "Navistar’s partnership with a well-capitalized strategic leader such as VW with hopes of a full buyout later presents a better alternative for both equity and credit holders versus restructuring or waiting for a cyclical recovery," observes CreditSights.
- There's some anxiety with traders on the impact on rivals of a stronger Navistar. PACCAR (PCAR -1.5%), Cummins (CMI -6%), CNH Industrial (CNHI -0.9%), and Supreme Industries (STS -0.9%) are all lower in mid-day trading.
Tue, Jul. 26, 8:33 AM
Mon, Jul. 25, 5:30 PM
- ABG, ACW, AHGP, AKS, ALLY, AOS, ARLP, ASTE, ATI, AUDC, AVY, AXE, AXTA, BAX, BEAV, BP, BPOP, CAT, CHKP, CIGI, CNC, CNHI, CNX, CPLA, CSL, CTG, CVLT, CYNO, DD, DTE, EEFT, EXAS, FBC, FCH, FCX, FELE, FIS, FMER, GPK, HOT, HUBB, HZO, ICLR, JBLU, JNS, KEY, KKR, LLY, LPT, MAS, MBLY, MCD, MDXG, MMM, NCI, NEO, NLSN, NORD, PCAR, PCH, RAI, RDWR, SAH, SIR, SIRI, ST, TGNA, TNC, TOWR, TROW, UA, USG, UTX, VLO, VZ, WAT, WDR, WWW, XRS
Mon, Jul. 25, 2:58 PM
- Deere (DE -2.8%) is downgraded to Underweight from Neutral with a $67 price target, cut from $76, at Piper Jaffray, which believes the current agricultural downturn will persist into 2017 for a fourth consecutive year.
- After speaking with growers, agronomists and dealers, Piper analyst Brett Wong says growing conditions have been extremely favorable and he foresees further pressure on corn prices after another strong year of U.S. corn yields, and grain prices also will remain weak, resulting in further declines in farm machinery demand.
- Farm machinery OEM stocks continue to trade at elevated multiples, expecting that this year will be trough demand with a recovery next year; Piper believes that overall global farm machinery demand will be down next year, which does not support current expectations for the stocks, and that estimates and valuation multiples are at risk.
- The firm also downgrades AGCO (AGCO -3%) and CNH Industrial (CNHI -2.6%) to Underweight from Neutral with respective $37 and $5 price targets.
Tue, Jul. 19, 7:24 AM
- The European Commission fined a group of truck makers €2.93B ($3.24B) for colluding on truck prices for over 14 years.
- The companies which admitted to the charges include Daimler (OTCPK:DDAIF), Volvo/Renault (OTCPK:VOLVY, OTC:RNSDF, OTCPK:RNLSY), MAN (OTCPK:VLKAY), Iveco (NYSE:CNHI), and DAF (NASDAQ:PCAR). MAN wasn't fined because it came forward to alert the EC of the cartel.
- "For 14 years they colluded on the pricing and on passing on the costs for meeting environmental standards to customers. This is also a clear message to companies that cartels are not accepted," said Commissioner Margrethe Vestager.
- European Commission press release
Thu, Jul. 7, 9:16 AM
Tue, Jul. 5, 2:18 PM
- Truckmakers face heavy fines from the European Union over price fixing charges, according to Bloomberg.
- Although some truck manufacturers have set aside provisions to pay for the expected penalties, it's unclear which companies will end up having the largest exposure.
- The sector is down across the board on the day, including PACCAR (NASDAQ:PCAR) -3.1%, Navistar (NYSE:NAV) -9.1%, Daimler (OTCPK:DDAIF) -5.4%, Volvo (OTCPK:VOLVY) ADRS -6.1%, Supreme Industries (NYSEMKT:STS) -8.5%, and CNH Industrial (NYSE:CNHI) -6.6%.
Thu, Jun. 23, 8:58 AM
- Potash Corp. (NYSE:POT) +3.2% and Mosaic (NYSE:MOS) +2.6% premarket following reports that Belarus may cooperate with Russian potash producer Uralkali for the first time since a dispute ended the alliance between the world's two biggest potash producers in 2013, triggering a fall in global prices that have not yet fully recovered.
- Belarus Pres. Lukashenko hinted at cooperation during an event in Minsk but did not discuss his conditions; the previous joint venture was based in Minsk, at that time a crucial condition for Belarus and the main concern for Uralkali.
- Lukashenko also said Belaruskali had signed a new potash supply contract with India, although the company later said it was still finalizing the deal; aside from Belaruskali and Uralkali, POT, MOS and Germany's K+S (OTCQX:KPLUY) supply potash to India.
- Other relevant tickers: AGU, CF, IPI, ICL, CNHI, SQM, UAN, IPHS, EVGN
Fri, Jun. 3, 12:19 PM
- Deere (DE +1.6%) moves higher after Goldman Sachs upgrades shares to Buy from Neutral with a $105 price target, raised from $87, as the firm sees significant upside to the mid-cycle as crop inventories tighten.
- Analyst Jerry Revich says he now prefers the ag machinery group to truck and construction machinery, given that high horsepower farm equipment is at a 30-plus year trough and improving U.S. row crop commodity demand could outstrip supply in 2017-18 due to rising feed and export demand for the first time in the soft commodity inventory cycle.
- The firm raises DE's mid-cycle EPS estimate to $7.50 from $6.25, “driven by higher operating leverage due to R&D and overhead leverage.”
- Today's upgrade is the latest of a flurry of analyst love for DE in recent days (I, II).
- Other farm equipment stocks also are higher, including CNHI +4.5%, AGCO +1.7%, LNN +1.2%.
Thu, May 19, 5:57 PM
- Shares of truck makers and suppliers posted losses in today's trade after Daimler (OTCPK:DDAIF) lowered its truck division guidance, forecasting lower EBIT and unit sales because of weaker than expected global truck markets.
- Daimler Trucks says it now expects EBIT and unit sales to come in significantly below the "very good" prior-year levels; the division previously had anticipated EBIT at the prior-year level and a slight decrease in unit sales.
- Daimler says the "difficult situation" of global truck markets has worsened in recent weeks, and now expects the overall market for Class 6 to 8 trucks will contract by ~15% in 2016.
- In today's trade: OTCPK:DDAIF -2.4%, PCAR -3.4%, NAV -3.3%, CNHI -0.8%, CMI -2.3%, ALSN -1.8%.
Fri, Apr. 29, 8:35 AM
Thu, Apr. 28, 5:30 PM| Thu, Apr. 28, 5:30 PM | 3 Comments
Mon, Apr. 18, 1:57 PM
- CNH Industrial (CNHI +4.9%) is upgraded to Buy from Neutral with an $8 price target at BofA Merrill Lynch, which says shares have lagged other farm equipment companies but is poised to benefit from even the slightest improvement in Latin America, where CNHI accounts for 10%-12% of its sales.
- Brazil and Argentina are the world’s only markets where planted acreage actually is growing over the long term,” BofA says, and that its recent farm equipment survey detected that the used combine inventory situation in North America became "slightly less worse last quarter... confirmed by industry auction expert Machinery Pete, who recently noted that used combine values ticked up a notch sequentially" in Q1.
- Now read Take profits on machinery stocks, J.P. Morgan says
Wed, Apr. 13, 2:24 PM
- Investors should take profits on machinery stocks ahead of earnings, J.P. Morgan analysts say, as valuations are stretched after the sector outperformed the S&P in Q1 +17% vs. +1.3%, and investors likely will have little tolerance for weaker than expected performance.
- The firm suggests avoiding Deere (DE +1.9%), Agco (AGCO +3.5%) and CNH Industrial (CNHI +3%) on weaker fundamentals with downside risk to the market outlooks for each region, and Paccar (PCAR +2.9%) on weaker NAFTA HD truck demand vs. its guide for a 12% decline in U.S. and Canada retail sales.
- However, JPM likes Allison Transmission (ALSN +2.4%) heading into Q1 as it has underperformed peers while its exposure to HD Class 8 long haul is limited and MD orders are up 5% YTD.
- Rated Neutral CAT, MTW, JOY, NAV, TEX, MCRN, PH, KMT, ETN, ITW.
Wed, Mar. 2, 6:37 PM
- Machinery stocks such as Terex (NYSE:TEX), Caterpillar (NYSE:CAT), Deere (NYSE:DE), Cummins (NYSE:CMI), Joy Global (NYSE:JOY) and Manitowoc (NYSE:MTW) may have come too far too fast, J.P. Morgan analyst Ann Duignan asserts.
- Duignan notes that at year-end 2015, the firm's machinery coverage was trading at a P/E multiple of ~14x estimated 2016 earnings, but at March 1, the group was trading at 16.3x; in terms of total shareholder returns, the group was up 5.5%, outperforming the S&P 500's YTD 2.8% loss.
- Within construction stocks, TEX (+25.9%), CMI (+15.1%), MTW (+5.3%) and CAT (+3.0%) have outperformed while Oshkosh (NYSE:OSK) (-9.2%) has underperformed; in agriculture machinery, Agco (NYSE:AGCO) (+11.1%), Deere (+6.3%) and CNH Industrial (NYSE:CNHI) (-2.2%) have outperformed, while JOY (+5.9%) has outperformed in the mining equipment group.