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Caterpillar, Equipment Maker Shares Boosted by Analyst

Published: Monday, 19 Oct 2009 | 1:00 PM ET

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By: Reuters

RBC Capital Markets initiated Caterpillar along with six other equipment makers with "outperform" ratings, and said the world's largest maker of earth-moving equipment is one of the best-positioned to benefit from improving global growth.

Caterpillar
Douglas C. Pizac / AP

Stocks in the sector were broadly higher Monday.

Analyst Seth Weber expects Caterpillar to benefit from higher "spending on construction, infrastructure, commodities, and the like."

"We have a favourable view of the commodities cycle, and mining machinery is our preferred way to participate," said Weber, who started mining equipment makers Joy Global Inc and Bucyrus International Inc with "outperform."

The analyst also started construction equipment maker Terex [TEX Loading... () ] and equipment provider United Rentals [URI Loading... () ] with "outperform," and said he expects both to benefit from a rebound in business activity.

Weber began flow control products maker Mueller Water Products [MWA Loading... () ]with an "outperform," and said the core water infrastructure markets are stabilizing.

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The analyst started RSC Holdings [RRR Loading... () ], which rents out forklifts, backhoes and cranes, with "outperform," and said RSC is well positioned to benefit from an eventual rebound in North American business activity.

However, Weber expects equipment sales to remain tough, particularly in cranes, and initiated H&E Equipment Services and crane maker Manitowoc Co with "sector perform" ratings.

The analyst started farm equipment makers Agco [AGCO Loading... () ] and Deere [DE Loading... () ] with "sector perform," and said the companies are positioned to benefit from global agricultural opportunities.