JPMorgan considers the possibility of buying Caterpillar’s stock

After the Caterpillar Dealer Finance Conference in Las Vegas, JPMorgan analysts announced to investors that Caterpillar’s end-consumer demand remains quite positive.

The analysts also gave optimistic commentary to investors by increasing the Caterpillar’s target price from $205 to $220 per share. It allowed the company to support the “outperform” rating.

Within the conference, it was discussed that Caterpillar’s end-consumer demand maintains a quite positive dynamics, especially demand for large equipment. However, some dealers noticed that orders of a smaller scale equipment were periodically canceled. Besides that, deliveries have improved over the summer months, but not enough for the inventory replenishment to a needed level.

Finally, the analysts at JPMorgan added that they saw an opportunity of acquiring Caterpillar with benefits for the stock capital, while the company’s estimates on sales and margins for the 3rd quarter remain quite muted, taking into consideration the fact that in the previous quarter the company’s results were quite disappointing. Generally, there is a lack of specifics for making projections.