Back to top

Press Releases

The Zacks Analyst Blog Highlights: Caterpillar, Vale, BHP Billiton, CNH Global and Komatsu

CAT VALE BHP KMTUY

 ZacksTrade Now

For Immediate Release

Chicago, IL – September 26, 2012 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include Caterpillar Inc. (CAT - Analyst Report), Vale S.A. (VALE - Analyst Report), BHP Billiton Limited (BHP - Analyst Report), CNH Global NV  and Komatsu Ltd. (KMTUY).

Get the most recent insight from Zacks Equity Research with the free Profit from the Pros newsletter: http://at.zacks.com/?id=5513

 

Here are highlights from Tuesday’s Analyst Blog:

 

Economic Woes Hurt CAT’s Long-Term View

 

Caterpillar Inc. (CAT - Analyst Report), the world's largest manufacturer of construction and mining equipment, recently joined the bandwagon of companies who have trimmed their revenue and earnings expectations in the wake of weaker-than-expected growth in the global economy. This news led to a 2.4% fall in Caterpillar share prices to $88.73 in after-hours trading.

Factoring in modest and insipid economic growth through 2015 and a less likely scenario of a worldwide recession, Caterpillar expects to generate revenues in the range of $80 to $100 billion in 2015. This is expected to translate into earnings per share in the range of $12 to $18 per share. This is based on the assumption of modest price realization and restrained material cost increases.

The company also expects unrelenting focus on cost control as well as modest efficiency improvement in its factories to contribute to its earnings. Caterpillar had earlier estimated earnings between $15 and $20 per share. The company remains committed to delivering results that will place it in the top 25% of the S&P 500 for total shareholder return.

For 2012, the company remains firm on its guided record sales of $68 billion to $70 billion and EPS forecast at $9.60. Caterpillar will discuss its 2013 expectations when it releases its quarterly earnings next month. The year 2013 is expected to be like 2012 with respect to worldwide economic growth with better growth expected in 2014.

The company remains hopeful that construction activity in the emerging markets will witness modest improvement. The company plans to remain focused on its cost control measures and continue to invest in research and development. However, Caterpillar has opted to be cautious toward acquisitions and investments in expansion.

This development comes after a year Caterpillar acquired Bucyrus Inc., a South Milwaukee-based manufacturer of surface and underground mining equipment. The $8.8 billion buyout of Bucyrus was the biggest deal ever in Caterpillar’s history. It capitalized on the rising demand for coal and minerals triggered by growth in the emerging nations.

The Caterpillar-Bucyrus combined portfolio expanded Caterpillar's mining equipment product line, resulting in the most expansive product offering in the mining equipment industry. The acquisition positioned Caterpillar as the leading global mining original equipment manufacturer. The company also acquired underground coal mining equipment manufacturer ERA Mining Machinery Limited in China to strengthen its presence in the Chinese mining industry in November last year.

However, the company’s plans to expand in the mining and China is currently under pressure as mining companies are revisiting and trimming their capital expenditures plans following the slowdown in economic expansion in China, the world’s largest user of coal and metals. Prices for coal and iron ore have dropped more than 20% this year due to slowing growth in China and European debt problems.

Among other miners, Vale S.A. (VALE - Analyst Report) plans to cut its 2013 mining budget and BHP Billiton Limited (BHP - Analyst Report) delayed an estimated $68 billion of projects. Approximately 70% of spending in mines is for large trucks and thus the cutback paints a grim picture for Caterpillar.

All said, we maintain our Neutral recommendation on Caterpillar. Furthermore, the recent loss of sales momentum, margin headwinds, negative impact of the European debt crisis and a slowing Chinese economy remain concerns. The quantitative Zacks #3 Rank (short term Hold rating) for the company indicates no clear directional pressure on the stock over the near term.

Peoria, Illinois-based Caterpillar Inc. is the manufacturer of construction and mining equipment, diesel and natural gas engines, and industrial gas turbines. The company is one of the few leading U.S. companies in an industry that competes globally from a principally domestic manufacturing base.

Caterpillar operates two divisions – Machinery and Power Systems (M&PS) and Financial Products. Caterpillar competes with the likes of CNH Global NV  and Komatsu Ltd. (KMTUY).

 

 

 

 

 

Want more from Zacks Equity Research? Subscribe to the free Profit from the Pros newsletter: http://at.zacks.com/?id=5515.

About Zacks Equity Research

Zacks Equity Research provides the best of quantitative and qualitative analysis to help investors know what stocks to buy and which to sell for the long-term.

Continuous coverage is provided for a universe of 1,150 publicly traded stocks. Our analysts are organized by industry which gives them keen insights to developments that affect company profits and stock performance. Recommendations and target prices are six-month time horizons.

Zacks "Profit from the Pros" e-mail newsletter provides highlights of the latest analysis from Zacks Equity Research. Subscribe to this free newsletter today: http://at.zacks.com/?id=5517

About Zacks

Zacks.com is a property of Zacks Investment Research, Inc., which was formed in 1978 by Leon Zacks. As a PhD from MIT Len knew he could find patterns in stock market data that would lead to superior investment results. Amongst his many accomplishments was the formation of his proprietary stock picking system; the Zacks Rank, which continues to outperform the market by nearly a 3 to 1 margin. The best way to unlock the profitable stock recommendations and market insights of Zacks Investment Research is through our free daily email newsletter; Profit from the Pros. In short, it's your steady flow of Profitable ideas GUARANTEED to be worth your time! Register for your free subscription to Profit from the Pros at http://at.zacks.com/?id=5518.

Visit http://www.zacks.com/performance for information about the performance numbers displayed in this press release.

Follow us on Twitter: http://twitter.com/zacksresearch

Join us on Facebook: http://www.facebook.com/home.php#/pages/Zacks-Investment-Research/57553657748?ref=ts

Disclaimer: Past performance does not guarantee future results. Investors should always research companies and securities before making any investments. Nothing herein should be construed as an offer or solicitation to buy or sell any security.

Media Contact
Zacks Investment Research

800-767-3771 ext. 9339

support@zacks.com

http://www.zacks.com

 

Please login to Zacks.com or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research

Close

Are you a new Zacks Member or a visitor to Zacks.com?

Top Zacks Features

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Zacks.com. Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
FELCOR LODG… FCH 10.47 +3.46%
OLD DOMINIO… ODFL 63.48 +1.18%
VASCO DATA… VDSI 13.57 +0.67%
AMEDISYS IN… AMED 20.18 +0.10%
LENOVO GROU… LNVGY 27.07 +0.04%