Zacks Investment Research upgraded shares of Caterpillar Inc. (CAT) from UNDERPERFORM to NEUTRAL on June 07, 2013, with a target price of $88.00.
Caterpillar's first quarter revenue declined 17% year over year to $13.2 billion and earnings per share slumped 45% to $1.31. Even though Caterpillar's sales declined 9% in Apr 2013, it improved from the 13% dip in Feb and 11% decline in March. Caterpillar's resolution of its issues related to ERA buy will help it realize the targeted benefits from the acquisition. Furthermore, inventory adjustments, which had affected results so far, have run their course and the company is planning to increase production in the second quarter of 2013. Resumption of stock repurchases will also provide support for the stock. However, a trimmed guidance, declining backlog, negative impact of the European debt crisis remain concerns. We have upgraded our recommendation from Underperform to Neutral on Caterpillar with a target price of $88.00.
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