Caterpillar's shares rose a more than 3-month high after the company affirmed its 2008 outlook.
The stock jumped more than 5 percent, enough to make it the biggest percentage gainer among Dow industrials components.
The Peoria, Ill. maker of construction machinery said after Tuesday's closing bell that it still expects 2008 earnings-per-share growth of 5 percent to 15 percent and revenue growth of 5 percent to 10 percent.
The company also reiterated its long-term EPS growth target of 15 percent to 20 percent, and said it expects annual sales to reach $60 billion by 2010.
Wachovia Analyst Andrew Casey reiterated his outperform rating on the stock, saying he continues to like the "appreciation prospects" over the long term. He said, however, the fact that Caterpillar didn't change its 2010 earnings goal was "relatively disappointing."
JPMorgan Analyst Stephen Volkmann kept his rating on the stock at underweight, saying in a research note that "investors will likely remain skeptical of a story that seems completely reliant on top line growth targets in the current macro environment."
Volkmann also said investors may be disappointed that Caterpillar didn't address its plans for the truck engine business.
Caterpillar reported in January that fourth-quarter earnings rose more than 10 percent, helped by strong sales to mining, energy and construction customers outside the United States, but the company warned it sees a recession as a "definite threat" to the U.S. economy.
The company, which is often seen as an economic indicator, said then that it has been seeing "anemic growth" in the U.S. economy.
"Over time, weakness in the economy has spread from housing to nonresidential construction and more recently to employment and manufacturing," Caterpillar said in a press release announcing its results. "A recession is defined as a broad downturn in the economy, a development that seems to be taking place."
However, Caterpillar predicted that fast-growing sales overseas would permit it to meet its 2008 sales and earnings forecasts even if a recession does materialize.
The company continues to expect earnings per share will rise between 5 percent and 15 percent from its 2007 profit of $5.37 a share, while revenue will grow between 5 percent and 10 percent from $45 billion.