Caterpillar upgraded to Buy from Neutral at Seaport Global
Seaport Global analyst Michael Shlisky upgraded Caterpillar (CAT) to Buy from Neutral with a $195 price target following Q4 dealer checks and discussions with the company and competitors. Shlisky, said dealers expect high-single-digit if not double-digit 2018 revenue growth, and many believe new equipment inventories are still too low. At Seaport's December conference, Caterpillar management noted robust trends at the end of 2017 are likely to last into the first part of 2018 and recent conversations with Deere (DE) regarding that company's Construction & Forestry business revealed that strong growth rates are expected for much of the year, the analyst wrote. Shlisky also believes that trends for Resource Industries are promising, as several key commodity prices have only just begun to see prices attractive enough to bring investment in new machines, Lastly, in Energy & Transportation, an oil price in the $60/bbl range is likely to support demand for CAT's turbine and other ancillary businesses, the analyst contends.