Macquarie starts Caterpillar with outperform

(BestGrowthStock) – Macquarie Equities started coverage of Caterpillar Inc (CAT.N: ) with an “outperform” rating, citing the earth moving equipment giant’s strategy to boost its mining equipment business to capitalize on strong demand.

Last month, Caterpillar said it would acquire mining equipment firm Bucyrus International (BUCY.O: ) to seal its position as the world’s No.1 maker of mining equipment.

“We think the acquisition will transform Caterpillar into a mining equipment powerhouse as they leverage Bucyrus through their dealer network to drive incremental revenue,” analyst Sameer Rathod wrote in a note to clients.

Strong demand for construction equipment in emerging markets, as well as recovery in the North American construction and engineering market, would also drive Caterpillar, said Rathod, who set a price target of $115 on the stock.

Caterpillar competes with Joy Global Inc (JOYG.O: ), Komatsu Ltd (6301.T: ) and Hitachi Construction (6305.T: ) in the mining equipment business.

Shares of Caterpillar, which have gained 27 percent in the last three months, were trading up about 1 percent at $92.35 in morning trade on the New York Stock Exchange.

(Reporting by Bijoy Koyitty in Bangalore; Editing by S. John Tilak)

Macquarie starts Caterpillar with outperform