Shares of Caterpillar (
) are outperforming the broader equities market on Tuesday
afternoon ahead of the company's second-quarter earnings report on
Wednesday morning. The stock is down 0.9 percent at last check,
compared to the S&P 500 which is down almost 1.4 percent.
Investors have seemingly been clinging to concerns sparked by a
warning from peer Cummins (
) on July 10th. Cummins said it is now looking for FY12 sales to be
flat year over year, down from a previous forecast looking for 10
percent growth. While Cummins shares tumbled about 9 percent,
shares of Cat plunged about 3.5 percent. Caterpillar shares have
not been able to push back over the $84 level since the warning.
Analysts on Wall Street expect Caterpillar to report quarterly
earnings of $2.28 per share on sales of $17.11 billion. The company
reported EPS of $2.37 and $1.52 in the first quarter of 2012 and
second quarter of 2011, respectively.
Despite the recent warning from Cummins, analysts on Caterpillar
have stayed bullish: our
page for Cat shows 11 sell-side firms with a Buy rating on the
stock, five with a Neutral, and none suggesting to sell.
- JPMorgan - Amid Cummins reduced outlook and volatility in
macro data which is likely to continue through 2012, the firm
remains "bullish on global GDP
growth over the long-term, as emerging markets are likely to
continue to outgrow
developed economies for the foreseeable future (despite current
headwinds in China and Brazil)." JPMorgan warned "Any notable
deterioration in the macro environment, particularly in
developing regions (China), could result in a potential slowdown
in demand for mining equipment..."
The firm lowered its CY12 EPS estimate from $9.62 to $9.20 and
its CY13 estimate from $12.06 to $10.89 following the Cummins
Maintains Overweight but recently reduced the stock's price
target from $132 to $109.
- Wells Fargo - the firm cited "a lackluster channel check,
continued macroeconomic concerns, and strengthening dollar..."
for reduced estimates. Wells Fargo said slower-than-expected
growth could lead Caterpillar "to modify H2 12 through 2013
The firm said "most of the lower earnings potential likely has
been factored in by investors, so we expect CAT to Outperform
from here on any sentiment improvement."
Now expects Caterpillar to report second-quarter EPS of $2.25,
down from $2.45 previously, FY12 EPS of $9.05, down from $9.75
previously, and FY13 EPS of $9.80, down from $11.25 previously.
Wells Fargo reduced its valuation range from $127-$130 to
$99-$102 on July 6th.
The company normally posts quarterly figures just after 7:30am ET.
Tune in to our
category to get an analysis of the results within seconds of the
official press release.