Pro Sees 30% Upside for Mining Equipment Stock

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Although construction and mining giant Caterpillar cut its full-year outlook and missed Wall Street's revenue estimates, one analyst says the stock is a "buy" if global growth is positive.

"As long as the global economy grows positively — even if it's a slower growth rate — then demand for things like hard commodities are going to continue to rise," said Ann Duignan, an analyst at JPMorgan.

The company has been hit by falling coal prices, which have forced companies to pull back on production and purchases of mining equipment.

On Monday, the company forecast earnings of $9 to $9.25 per share and sales of $66 billion. The company had previously guided about $9.60 per share.

Duignan has an "overweight" rating and a $109 price target for year's end, on the company's shares. That represents a roughly 30 percent upside from the stock's price on Monday.

"As long as global growth is positive in our view then Caterpillar, particularly at current valuations, is a great buy," Duignan said.

She said that if the global economy does reaccelerate, Caterpillar stock, which underperformed the S&P 500 over the summer, will be one of her top picks.

—By's Katie Little; Follow Katie Little on Twitter @katie_little

Reuters contributed to this report

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JPMorgan acted as lead or co-manager in a public offering of equity and/or debt securities for Caterpillar within the past 12 months.