Goldman Sachs (NYSE:GS) said they really like the short-term prospects of Caterpillar (NYSE:CAT), and increased their earnings per share and price target estimates for the large equipment company.
Even so, the risk/reward balance over the long term is balance said Goldman, and they maintained their "Neutral" rating on Caterpillar.
Earnings per share estimates for the next three were increased by an average of 10 percent. 2010 was raised to $4.25; 2011 to $5.45; and 2012 to $6.80 a share.
That is dependent on an economic recovery said Goldman, although the strength of commodities and the resultant demand for equipment for miners, and possibly farmers in reference to agriculture, could keep the company growing even if the majority of the rest of the economy sputters.
Many companies had been holding off on purchasing new equipment, and now they must do it, and so that restocking should also benefit Caterpillar in the near term.
The price target on Caterpillar was raised by Goldman from $70 to $77.
Caterpillar closed Wednesday at $76.18, down $0.21, or 0.27 percent.
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