NEW YORK (TheStreet) -- Shares of Caterpillar (CAT) - Get Report were higher in pre-market trading on Wednesday as Deutsche Bank initiated coverage of the stock with a "buy" rating and a $98 price target.
The firm initiated coverage of the U.S. Machinery sector in general with a "cautious" view, but said that Peoria, IL-based Caterpillar is its top pick in the market.
Deutsche Bank added that natural resources markets may have bottomed and it expects low industry organic growth through 2020.
However, Caterpillar is the firm's top pick in the sector due to the company's ability to grow earnings per share independent of volumes and through "'in the bag restructuring payback."
"We think Caterpillar is the next Deere (DE), as the market is not giving the company credit for $2.25 billion cumulative cost savings executed over 2013 to 2016," Deutsche Bank noted.
Separately, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author.
TheStreet Ratings rated this stock as a "buy" with a ratings score of B-.
The company's strengths can be seen in multiple areas, such as its good cash flow from operations, expanding profit margins and increase in stock price during the past year. We feel its strengths outweigh the fact that the company has had somewhat weak growth in earnings per share.
You can view the full analysis from the report here: CAT