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Jefferies Downgrades Several Machinery Companies

Stocks in this article: CAT CNH ETN KMT OSK PH TWI

The Associated Press

U.S. machinery companies may be facing a tough road ahead because of slowing business overseas and moderating demand the U.S., according to a Jefferies analyst.

Analyst Stephen Volkmann cut his ratings and price targets on a number of machinery companies Wednesday; including Caterpillar Inc., CNH Global NV, Eaton Corp., Kennametal Inc., Parker Hannifin Corp. and Titan International Inc.

He wrote in a note to investors that the industry faces softer demand in Europe and some developing markets. And the sluggish U.S. economy and a hot, dry summer in the country's crop belt could hinder demand for companies that do business there. Cutbacks in North American mining and gas drilling have also reduced demand, Volkmann said.

The analyst did see one exception, upgrading Oshkosh Corp. to "Buy" from "Hold" as it has little business overseas.

"This is largely a macro call, with little company specific data so far," Volcker wrote.

However, he still believes in the long-term strength of the sector and expects business will revive in the future because of pent-up demand. Shares of companies in the sector were mixed in afternoon trading.

--Caterpillar: Up 67 cents to $82.06

--CNH Global: Down 82 cents to $35.78

--Eaton: Up 73 cents to $39.10

--Kennametal: Up 35 cents to $33.99

--Parker Hannifin: Up $2.67, or 3.6 percent, to $76.55

--Titan International: Down $1.28, or 5.7 percent, to $21.08

--Oshkosh: Up $1.09, or 5.4 percent, to $21.31

Copyright 2011 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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