William Blair cut its target to $90.00 and J.P. Morgan cut its target to $85.00 from $92.00. Jefferies set a much more conservative target price of $74 in the middle of May, so today’s move may simply be a catch-up trade.  Barclays cut the target down to $96 in early May. It is probably worth noting that today’s price target cuts are just a week ahead of the earnings report due on May 31, 202.

Today’s price target cuts still show upside in the stock with a consensus price target of $97.19 from Thomson Reuters, but that may be a figure which has not been updated since these two price target cuts were made.

Shares were at $89.71 at the end of February after another drop and the talk was that Joy Global could have been a takeover target back then.  If some were hoping that a buyout would come when the stock was at $89.00 or so, they must really love the thought of a buyout when shares are closer to $60.00.  It was the acquisition of Bucyrus by Caterpillar Inc. (NYSE: CAT) for a sum of $7.6 billion that caused some secondary and tertiary buyout hopes.  The equity market capitalization of Joy Global today is just under $6.4 billion.

Joy Global shares are down 6.3% at $60.00 and the 52-week range is $57.48 to $101.44.  This one has traded under $60.00 briefly today.

Joy Global operates under the two units of P&H Mining Equipment and Joy Mining Machinery, where it manufactures and markets original equipment and aftermarket parts and services for both the underground and above-ground mining industries and certain industrial applications.

JON C. OGG

24/7 Wall St. has gone through the industrial products, chemicals, and heavy equipment makers to see which outfits offer investors the least risk and most reward.  Consensus targets are from Thomson Reuters and we have evaluated the following: Air Products & Chemicals Inc. (NYSE: APD); The Boeing Company (NYSE: BA); Caterpillar Inc. (NYSE: CAT); Deere & Company (NYSE: DE); The Dow Chemical Company (NYSE: DOW); E. I. du Pont de Nemours and Company (NYSE: DD); Danaher Corp. (NYSE: DHR); and Illinois Tool Works Inc. (NYSE: ITW).

Air Products & Chemicals Inc. (NYSE: APD) traded at $79.50 with a market value of $16.8 billion.  The consensus target price from Thomson Reuters is $98.75 and the 52-week trading range is $72.26 to $98.00.  Air Products’ most recent yield was listed as 3.2%. The implied upside to the consensus target is 24% but we would note that the consensus target is still above the 52-week high.

The Boeing Company (NYSE: BA) traded at $71.05 with a market value of $53.2 billion.  The consensus target price from Thomson Reuters is $86.08 and the 52-week trading range is $56.01 to $78.35.  This DJIA component’s most recent yield was listed as about 2.5%. The implied upside to the consensus target is 21% but we would note that the consensus target is almost $8.00 higher than the 52-week high and you have to go back to before the recession to find Boeing shares that high.

Caterpillar Inc. (NYSE: CAT) traded at $91.25 with a market value of $59.5 billion.  The consensus target price from Thomson Reuters is $130.95 and the 52-week trading range is $67.54 to $116.95.  Caterpillar’s most recent yield was listed as 2.0%. The implied upside to the consensus target is 44% but we would note that the consensus target is almost 10% above the 52-week high.

Deere & Company (NYSE: DE) traded at $74.50 with a market value of $30 billion.  The consensus target price from Thomson Reuters is $92.79 and the 52-week trading range is $59.92 to $89.70.  Deere’s most recent yield was listed as 2.4%. The implied upside to the consensus target is about 25% but we would note that the consensus target is about $3.00 higher than the 52-week high.

The Dow Chemical Company (NYSE: DOW) traded at $30.00 with a market value of $35.9 billion.  The consensus target price from Thomson Reuters is $37.23 and the 52-week trading range is $20.61 to $37.30.  Dow’s most recent yield was listed as a very high 4.2%. The implied upside to the consensus target is 24% but we would note that the consensus effectively is the same as the 52-week high.

E. I. du Pont de Nemours and Company (NYSE: DD) traded at $48.40 with a market value of $45.3 billion.  The consensus target price from Thomson Reuters is $58.33 and the 52-week trading range is $37.10 to $56.20.  DuPont’s yield was listed as about 3.5%. The implied upside to the consensus target is 20% and that target is about $2.00 above the 52-week high.

Danaher Corp. (NYSE: DHR) traded at $51.85 with a market value of $35.9 billion.  The consensus target price from Thomson Reuters is $60.95 and the 52-week trading range is $39.34 to $56.45.  Danaher’s most recent yield was tiny at only 0.2%. The implied upside to the consensus target is only about 17% and it is worth noting that the analyst consensus target is more than $4.00 above the 52-week high.

Illinois Tool Works Inc. (NYSE: ITW) traded at $54.40 with a market value of $26 billion.  The consensus target price from Thomson Reuters is $61.53 and the 52-week trading range is $39.12 to $59.27.  ITW’s most recent yield was listed as 2.6%. The implied upside to the consensus target is only about 13%, making this the least ‘implied upside’ winner of the lot.  This one is also only down about 8% from its most recent high as well.

You can see that there is a very mixed bag here.  The Dow Chemical Company (NYSE: DOW) leads in the dividend department with a 4.2% yield.  Caterpillar Inc. (NYSE: CAT) is the leader with ‘implied analyst upside’ of 44% but it seems a stretch in the upside if you look at where the stock has been and how volatile the stock has been.  Illinois Tool Works Inc. (NYSE: ITW) has the least amount of ‘implied analyst upside’ but it has also held up among the best during the market sell-off.

Gold & Silver Miners With Most Upside & Value

Major Oil Companies WIth Most Upside & Value

Conglomerates With Most Upside & Value

Your email address

subscribe

terms and conditions

JON C. OGG

Some companies, like General Electric Co. (NYSE: GE) and Caterpillar Inc. (NYSE: CAT) have been expanding their US manufacturing capacity. And smaller firms, too, have been either expanding or building new capacity in the US. But numbers are a little hard to come by.

Consulting firm Accenture plc (NYSE: ACN) has a report out with data that indicates that US firms are indeed moving back home. The firm surveyed 81 senior manufacturing executives at companies that average more than $2 billion in annual revenues. The report is available here.

According to those surveyed, 65% moved manufacturing operations in the past 2 years and 43% plan to move in the next 2 years, while 62% started new operations in the same period. The US led all countries in locations where plants were closed (60% of closings were in the US) and also led in locations to which operations are being moved, with 40% of plants moving to the US.

Western Europe was second in plant closings and China leads in new openings with 54% of new manufacturing plants going to China. The US is second in new plants, with 32% of new plants opening here. China is also expected to overtake Western Europe as the second largest market for US goods within three years.

The new construction in China reflects the belief that the country’s domestic demand will continue to expand and that being able to make things locally helps with meeting customer requirements and lowering costs. For manufacturers re-shoring to the US, the reasons are the same, especially for some durable goods makers.

How much the re-shoring movement means to the US economy depends to a large degree on whether the economy can create enough jobs to buy all those goods. The key is jobs and they are still scarce.

Paul Ausick

Like smaller competitors AGCO Corp. (NYSE: AGCO) and CNH Global NV (NYSE: CNH), Deere’s farm equipment sales in the US and Canada rose the most as acres under cultivation continue to grow. Sales in Asia were described as “up moderately, though slowing.” The largest of the equipment makers, Caterpillar Inc. (NYSE: CAT), has much more invested in Asia, particularly China, than does any of the others, and it was that commitment to China that haunted Caterpillar when it announced quarterly results last month. More about that later.

For the current quarter, Deere expects sales to rise 25% above the same period a year ago. Prices are expected to improve by about 4%, and currency effects are expected to reduce sales by about 4%. For the fiscal year, Deere forecast sales growth of about 15%, with a 4% improvement in prices and a -3% currency exchange impact. The company also raised its total net income forecast from $3.275 billion to $3.35 billion for the year.

Deere, unlike Caterpillar, does not have significant exposure in China. Caterpillar employs 11,000 people in the country and expects that number to double by 2015. The company pointed out that just 3% of its global revenues in the first quarter were attributable to China. Although the two statements may not be linked in management’s mind, they are in investors’ minds.

When Cat had to downplay China’s role in its business, what investors took away is that business was falling in China. And the new plants and new employees in Caterpillar’s Chinese operations are now going to be a drag on earnings, not a positive. That probably won’t turn out to be the case, but that was the effect of what the company had to say.

None of these four has had a particularly good past 12 months. As of last night’s close, every one’s share price is lower than it was a year ago, with AGCO down -19%, Deere and Caterpillar down -13%, and CNH down just less than -1%. Growth in North America is not going to drive record sales, only Asia can do that. As long as the Chinese economy continues its slowed growth, sales of farm and construction equipment won’t jump off the charts.

Shares of Deere are up about 1% in the pre-market, at $77.35, in a 52-week range of $59.92-$89.70.

Paul Ausick

Boeing machinists walked off the job in 2008. Boeing’s C-17 plant in Los Angeles was shut in the summer of 2010 because workers were upset with the company’s benefits offer. There was more trouble with unions, which have members who work at Boeing, late last year. Machinists pressured Boeing then about the construction of a plant in South Carolina. The battle was great enough to involve the National Labor Relations Board. The UAW would never have had similar leverage at the Big Three over the past four years. And the future power of that union has been undermined at the car companies, with the agreement of the unions oddly enough, in exchange for a part of the financial turnaround of Detroit.

UAW workers at GM used to get among the best benefits given by any U.S. company. Hourly wages were high enough that, combined with these benefits, GM lost its margin advantage over Japanese rivals. The years and years of extraordinary compensation are over. New blue-collar workers at GM get a fraction of what their predecessors did. But GM paid 47,500 blue-collar workers $7,000 each earlier this year because of the car company’s large profits.

Caterpillar workers can strike. They have pay and benefits to maintain. Caterpillar’s success allowed them to keep much of what they are fighting for now. GM workers could not do the same. All each of them gets is $7,000.

Douglas A. McIntyre

BP (NYSE: BP) profits fall as it sells some assets to pay for the Gulf spill. (Reuters)

New York state pension funds vote against five Walmart (NYSE: WMT) directors. (Reuters)

Microsoft (NASDAQ: MSFT) takes a position in the Barnes & Noble (NYSE: BKS) e-reader operation. (Reuters)

Two top Federal Reserve officials say there will be no more easing by the central bank. (Reuters)

A shareholder sues Google (NASDAQ: GOOG) to stop a stock split that would favor management control. (Reuters)

Bank of America (NYSE: BAC) will cut a large number of investment and commercial bankers. (WSJ)

Sales of cars in Japan jumps in April. (WSJ)

Economies of scale, still enjoyed because of Nokia’s (NYSE: NOK) size, may help turn around the company. (WSJ)

Home ownership falls to a 15-year low. (WSJ)

A large number of management departures hurts the ability of Freddie Mac and Fannie Mae to recover. (WSJ)

St. Jude Medical (NYSE: STJ) continues to wrestle with problems with one of its heart devices. (WSJ)

Coca-Cola (NYSE: KO) may buy Monster Beverage (NASDAQ: MNST), an energy drink company. (WSJ)

General Electric (NYSE: GE) sales in Australia rivals its Chinese revenue. (WSJ)

Caterpillar (NYSE: CAT) may face a large strike. (WSJ)

Delta Air (NYSE: DAL) finally decides to buy a northwest refiner. (WSJ)

Banks sharply increase loans to companies with junk-bond ratings. (WSJ)

The S&P 500 posts its first monthly loss since November. (NYT)

Germany continues to insist that austerity is the best means to improve the finances of troubled EU nations. (FT)

Groupon (NASDAQ: GRPN) will add two financial experts to its board. (FT)

Douglas A. McIntyre

Many investors might actually hope that we do get a 10% correction so that they can get into stocks again.  Recent reports have shown that the average investor has still shied away from stocks in favor of the safety of bonds.  The DJIA peaked above 13,300 in March after having ended 2011 at 12,217.56.  It is hard to imagine this, but the DJIA had a low of under 6,500 in early 2009 at the peak of the panic selling.  That was back to 10,000 by October of 2009 and the market is above 13,000 at the current time.  Is it possible that the DJIA has really doubled from the lows and Joe Public has not participated at all?

We want to take a look at the valuations, dividend yields, performance, and underlying trends driving some of the key industry leaders which have already reported earnings and offered guidance in order to get a better handle on what to expect for the coming summer.

Chrysler is also acting as a strong barometer for U.S. auto sales, even if the highly-volatile durable goods orders have been weak for two months.  While the retail segment is marred by a couple of undercurrents right now, sales have remained positive in 2012 when some were expecting some negative overall numbers. Now we also have a fresh report calling for at least 8% dividend growth from DJIA stocks this year and the components have so far been hiking dividends above what was expected.

We have taken a look at the following: Bank of America Corporation (NYSE: BAC) and J.P. Morgan Chase & Co. (NYSE: JPM) in banking; General Electric Co. (NYSE: GE) as the conglomerate leader (and economic barometer); Alcoa Inc. (NYSE: AA) as a leading indicator of the metals markets; Caterpillar Inc. (NYSE: CAT) as the construction and super-heavy equipment leader; Microsoft Corporation (NASDAQ: MSFT) and Intel Corporation (NASDAQ: INTC) as the tech leaders; Apple Inc. (NASDAQ: AAPL) not as a DJIA component but as an asset class; and Exxon Mobil Corporation (NYSE: XOM) and Chevron Corporation (NYSE: CVX) as the American leaders in Big Oil. We also want to consider E. I. du Pont de Nemours and Company (NYSE: DD), or DuPont,

A Recent History of “Sell In May and Go Away”

2009 was a very different year because the market was recovering from the crash and stocks were still benefitting from that move.  2010 was a nasty start of summer as investors worried about a double-dip recession as housing prices continued to sink and unemployment was still a prime concern.  We also faced that punishing event called ‘The Flash Crash.’ Another big distraction was BP PLC (NYSE: BP) for its disaster in the Gulf and America and the rest of the world was starting to consider some problems in nations called the PIIGS.  The market peaked around 11,300 in late April and had sunk to a 9,800 by early May.  Even around July 6 the DJIA was only around 10,200 and was only back up to almost 10,500 after the end of August around Labor Day.

2011 felt close to a repeat of 2010 with the worries not just about the PIIGS but about the possibilities of a U.S. debt rating downgrade which did ultimately come.  Housing was still in the tank and employment was not yet in a full-blown recovery in America. While the end of April to the end of May did see a drop of 800 points in the DJIA from almost 12,900 in late April and early May to just above 12,000 by late May and 11,900 by late June, it was late-July and August which were the cruel months for the DJIA as companies began to suffer serious earnings concerns. The DJIA bottomed out just under 10,600 in August.  By late-October the market was back above 12,000 again.

So, here we sit at the end of April in 2012 with a long road of political hate ahead of us, and an economy that is still sluggish but one which not go into recession.  Right now the labor data is still choppy even though unemployment is down to 8.2% due to lower labor force participation rates.  Earnings growth has slowed down and Europe remains a key concern with the stable European nations being a concern on top of the PIIGS.  The good news is that equity values remain attractive and the FOMC is still pledged to a policy of maintaining an “exceptionally low rate policy” through the end of 2014.

The Leading Companies As Economic Barometers

Bank of America Corporation (NYSE: BAC) and J.P. Morgan Chase & Co. (NYSE: JPM) are the two DJIA money-center banking leaders and they are both at discounts to their respective book values.  Both banks turned in earnings reports that show some stabilization even if mortgage woes remain a hangover from yesteryear.  2012 has also been a period of incredible recovery from an awful 2011.  Bank of America effectively doubled from trough to peak from late 2011 to the end of the first quarter and at $8.26 it has a consensus analyst target of effectively $10 that implies upside of close to 21%.  J.P. Morgan is around $43 it has risen 35% from trough to peak from late 2011 to the present time.  Its dividend yield is back up to almost 3% and the price target of about $52.80 implies upside of almost 23%.

Chrysler posts its best earnings since being partially taken over by Fiat. (Reuters)

Samsung says its new Galaxy phone will use a quad-core processor. (Reuters)

Georgetown University’s Center on Education and the Workforce and researchers from Harvard find that, for the first time in decades, young people are not better-educated than the generation before them. (WSJ)

AIG (NYSE: AIG) bonds attract a large number of investors. (WSJ)

The CEO of Groupon (NASDAQ: GRPN) says the company must mature to be more successful. (WSJ)

The China’s Ministry of Industry and Information Technology says foreign companies could team with China to produce rare earths. (WSJ)

The Senate passes legislation to underwrite Post Office losses and allow it to keep current services. (WSJ)

The UK falls back into recession in the first quarter. (WSJ)

The FDA will set a new system to detect faulty medical devices. (WSJ)

The European divisions of General Motors (NYSE: GM) and Ford (NYSE: F) are likely to drag down corporate earnings. (WSJ)

US Airways (NYSE: LCC) continues a push for a buyout of American Airlines parent AMR. (WSJ)

Caterpillar (NYSE: CAT) raises forecasts. (WSJ)

Yahoo! (NASDAQ: YHOO) to launch a new program hosted by Katie Couric. (WSJ)

Formula One plans a $2.5 billion IPO in Singapore. (WSJ)

Exxon Mobil (NYSE: XOM) and Chevron (NYSE: CVX) each raise dividends. (FT)

French presidential candidate François Hollande wants Germany to take up new stimulus plans for Europe. (FT)

Nasdaq (NASDAQ: NDAQ) shortens a waiting period for the Facebook IPO as a way to get the social network’s listing. (Bloomberg)

Alcatel-Lucent (NYSE: ALU) posts poor earnings, which drags down its shares. (Bloomberg)

Douglas A. McIntyre

The unofficial closing bells put the DJIA up more than 89 points to 13,090.95 (0.69%), the NASDAQ rose more than 68 points (2.3%) to 3,029.63, and the S&P 500 rose 1.37% or nearly 19 points to 1,390.70.

There were several analyst upgrades and downgrades today, including Apple raised to ‘outperform’ at Scotia and maintained ‘buy’ with a target price of $775 at Canaccord Genuity; J.C. Penney Co. Inc. (NYSE: JCP) raised to ‘market perform’ at BMO; McDonald’s Corp. (NYSE: MCD) cut to ‘hold’ at Argus; Time Warner Cable (NYSE: TWC) started as ‘buy’ at Citigroup; Wal-Mart Stores Inc. (NYSE: WMT) cut to ‘hold’ at Argus; and Buffalo Wild Wings (NASDAQ: BWLD) raised to ‘buy’ at Deutsche Bank.

Earnings reports since markets closed last night have led to some price changes as of the last half hour of trading today: Apple is up 8.9% at $610.02 (our coverage here); Anixter International Inc. (NYSE: AXE) is down -4% at $66.76; Edwards Lifesciences Corp. (NYSE: EW) is up 11.5% at $81.74; Juniper Networks Inc. (NYSE: JNPR) is down -4% at $20.78; Norfolk Southern Corp. (NYSE: NSC) is up 3.6% at $72.77; Newfield Exploration Co. (NYSE: NFX) is up 5.2% at $35.47; AutoNation Inc. (NYSE: AN) is down -0.9% at $33.27; Clayton Williams Energy Inc. (NASDAQ: CWEI) is up 1.6% at $76.45; Corning Inc. (NYSE: GLW) is up 6.7% at $14.25; Harley-Davidson Inc. (NYSE: HOG) is up 6.1% at $53.45 after posting a new 52-week high of $53.98 earlier today; Lithia Motors Inc. (NYSE: LAD) is up 7.4% at $26.84; and US Airways Group Inc. (NYSE: LCC) is up 2.5% at $9.55 (more coverage here).

Other standouts from today include the following stocks:

Caterpillar Inc. (NYSE: CAT) is down -4.5% at $103.55. The heavy equipment maker reported declining sales in China as growth in the country has slowed, which led to the sell-off today.

CNH Global NV (NYSE: CNH) is up 3.6% at $45.66. The farm equipment maker beat EPS estimates by almost 50% and sales were also higher.

Boeing Co. (NYSE: BA) is up 5.3% at $77.06. The aircraft maker reported solid earnings and revenues this morning. More coverage here.

Stay tuned for Thursday. We have noted the following events on the schedule (all times Eastern):

• 8:30 a.m. – New unemployment benefits claims
• 8:30 a.m. – Chicago Fed national activity index
• 10:00 a.m. – Pending home sales index
• 10:30 a.m. – EIA weekly natural gas storage report
• 11:00 a.m. – Kansas City Fed manufacturing index
• 1:00 p.m. – 7-year note auction
• 4:30 p.m. – Federal Reserve balance sheet and money supply

Your email address

subscribe

terms and conditions

Paul Ausick

Ball Corporation (NYSE: BLL) Cut to Neutral at Credit Suisse.

Caterpillar Inc. (NYSE: CAT) Raised to Buy at BofA/ML.

Chesapeake Energy Corporation (NYSE: CHK) Cut to Neutral at Citigroup.

E-Commerce China Dangdang Inc. (NYSE: DANG) Cut to Neutral at Credit Suisse.

Esterline Technologies (NYSE: ESL) Raised to Outperform at Credit Suisse.

GeoResources, Inc. (NASDAQ: GEOI) named as Value stock of the day at Zacks.

Infosys Ltd. (NASDAQ: INFY) Cut to Hold at Deutsche Bank; Cut to Neutral at Macquarie.

Invesco, Ltd. (NYSE: IVZ) named as Bull of the Day at Zacks.

JetBlue Airways Corp. (NASDAQ: JBLU) Reiterated Hold at Argus.

Philips Electronics N.V. (NYSE: PHG) Named as Bear of the Day at Zacks.

Plains All American Pipeline. L.P. (NYSE: PAA) Reinstated as Outperform at Credit Suisse.

UIL Holdings Corp. (NYSE: UIL) Reiterated Hold at Argus.

Under Armour, Inc. (NYSE: UA) Reiterated Buy at Canaccord Genuity.

Vornado Realty Trust (NYSE: VNO) Raised to Outperform at Keefe Bruyette & Woods.

Waddell & Reed Financial Inc. (NYSE: WDR) Raised to Neutral at Citigroup.

If you enjoyed the top analyst upgrades and downgrades, you can join our free email newsletter that includes analyst summaries each morning sent right to your inbox.  We also cover top issues such as IPOs, special financial exclusives, mergers and more. Sign up in the box below.

Your email address

subscribe

terms and conditions

JON C. OGG