As for Wednesday's scheduled news, aforementioned Dow component Caterpillar reports ahead of Wednesday's opening bell, and the average estimate of analysts polled by Thomson Reuters is for earnings of $2.13 a share on revenue of $16.22 billion. In the same period a year earlier, the company earned $1.84 a share on revenue of $12.95 billion.
Shares of the Peoria, Ill.-based maker of construction and mining equipment have outperformed in 2012, rising nearly 18%, after being one of the weaker blue chips in 2011. The company is coming off a 34% upside profit surprise in the fourth quarter, so between that and the stock's appreciation, there is some pressure on management to deliver another resounding beat.
It's worth noting as well though that the shares hit their 52-week high of $116.95 on Feb. 25, so the past two months have underwhelming. On April 11, Caterpillar announced the decision to maintain its quarterly cash dividend at 45 cents a share, which gives the stock a respectable forward annual yield of 1.7% at current levels.
The sell side is very bullish ahead of the report with 18 of the 24 analysts covering Caterpillar at either strong buy (8) or buy (10), and the 12-month median price target at $131, implying potential upside of 21% from Tuesday's close at $108.40.Morgan Stanley is one of the bulls, rating the stock at the equivalent of strong buy with a $125 price target. The firm thinks Caterpillar could lift its current outlook for earnings of $9.25 a share in 2012 if sales/revenue come in at the midpoint of its $68 billion to $72 billion range. Wall Street's current consensus view is for full-year earnings of $9.54 a share. "Management's long-term orientation and a ~$30 billion backlog should allow for a positive tone and a potential guidance raise, although we'll want to focus on the fragile recovery in core end markets," Morgan Stanley said. "We view CAT as well positioned to capitalize on positive cyclicality and remain Overweight." Check out TheStreet's quote page for Caterpillar for year-to-date share performance, analyst ratings, earnings estimates and much more.
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass + 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV