Jefferies Says Prep for Downside in Machinery Stocks, Keep Powder Dry
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Rating Summary:
15 Buy, 8 Hold, 1 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 0 | Down: 0 | New: 0
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As macro concerns continue to plague Europe, emerging markets , and the U.S., Jefferies analyst remain cautious on Machinery stocks and see another 5 percent in downside, despite a 10-15 percent declined in just the past few weeks.
"We see more downside than upside risk in 3Q machinery earnings, and despite modest expectations we still recommend a defensive short term stance," said analyst Stephen Volkmann.
"We are lowering many of our estimates for 2013 and 2014. We see earnings and forecast risk at Caterpillar Inc. (NYSE: CAT) Eaton Corporation (NYSE: ETN) and Kennametal Inc (NYSE: KMT), while AGCO Corporation (NYSE: AGCO) and Ingersoll-Rand (NYSE: IR) and Titan International Inc (NYSE: TWI) top our list of more defensive names," said Volkmann.
Longer term, he still sees significant pent up demand in most industrial end markets when macro concerns fade.
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"We see more downside than upside risk in 3Q machinery earnings, and despite modest expectations we still recommend a defensive short term stance," said analyst Stephen Volkmann.
"We are lowering many of our estimates for 2013 and 2014. We see earnings and forecast risk at Caterpillar Inc. (NYSE: CAT) Eaton Corporation (NYSE: ETN) and Kennametal Inc (NYSE: KMT), while AGCO Corporation (NYSE: AGCO) and Ingersoll-Rand (NYSE: IR) and Titan International Inc (NYSE: TWI) top our list of more defensive names," said Volkmann.
Longer term, he still sees significant pent up demand in most industrial end markets when macro concerns fade.
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