Wachovia Maintains a 'Market Perform' on Caterpillar (CAT), Lowers Estimates and Valuation Range

December 23, 2008 12:06 PM EST
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Wachovia maintains a 'Market Perform' rating on Caterpillar Inc. (NYSE: CAT), but lowers estimates and valuation range from $78-81 to $60-63.

Wachovia analyst says, "Based on our channel checks, we are seeing further weakening in Europe and American demand and pricing environment and a likely H2 09 flattening of Electric Power demand...We are reducing our 2008E (to $6.01 from $6.08), 2009E (to $6.25 from $6.50) and 2010E (to $7.35 from $7.70). We are pushing out our N American recovery timing expectation to 2010 from 2009, and we are decreasing expectations for Europe, Africa and Middle East...We expect volatile performance near term due to global macroeconomic uncertainty. We continue to expect CAT to achieve earnings growth through the next few years on the strength of its exposure to the mining and energy markets."

Caterpillar Inc. operates in three principal lines of business: Machinery, Engines and Financial Products. Machinery deals with the design, manufacture, marketing and sales of construction, mining and forestry machinery.

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