Wall Street too bullish on Caterpillar for 2017
Caterpillar warned Thursday that Wall Street’s 2017 earnings targets for the industrial equipment company are too lofty despite some hopeful signs for its business, including higher commodity prices.
Analysts project the firm will earn $3.25 a share in 2017, but that estimate is “too optimistic considering expected headwinds,” a Caterpillar executive said in a presentation conference in Palm Beach, Florida.
There are a number of encouraging signs, including higher commodity prices, an OPEC deal to cut oil production and boost prices, and expectations that US President-elect Donald Trump will enact a major public works initiative, Caterpillar Resources Industries President Denise Johnson said.
But she also pointed to economic vulnerabilities, including volatile oil prices, a weak North American construction market and an uncertain outlook in Europe after Britain voted to leave the European Union.
Shares in Caterpillar were up 0.4 percent at $95.98 near 1740 GMT, but below session highs. Shares have jumped more than 11 percent since Trump’s election.
Customers in the mining industry have yet to open the spigots on capital spending following a twoyear downturn that badly hit the company’s results, Johnson told the conference. (AFP)