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Caterpillar Inc. (NYSE: CAT) is set to report its most recent financial results before the markets open on Wednesday. The consensus estimates are $3.12 in earnings per share (EPS) and $14.44 billion in revenue. The second quarter of last year reportedly had $2.97 in EPS and $14.01 billion in revenue.

Earlier this month, Credit Suisse maintained its Outperform rating on the shares, but its target on the equipment giant was lowered to $164 from $172, after evaluating the dealer survey results from the prior months.

According to Credit Suisse, 75% of dealers reiterated their prior forecasts calling for demand to be in a range of flat to up about 5%. The firm also noted that 25% of dealers cited modest risks to their full-year estimates.

The firm’s view is that Caterpillar’s demand is holding up, but there is also clearly less optimism on opportunities for upside to their forecasts from the first quarter while there is some downside risk. As for earnings in the second quarter, Credit Suisse’s Jamie Cook believes the risk is less around earnings per share in the quarter than the risks in the second half of 2019, as the improvement that was expected in mining and oil and gas orders likely will not materialize.

Credit Suisse also gave more specific regional and sector trends, as well as the used equipment market. Cook’s report said:

For the North American markets, demand is healthy across commercial construction, infrastructure and pipeline, whereas energy and mining were more mixed. Lead times for small and medium sized equipment have improved, although lead times are still extended on large equipment and engines. Parts availability appears to be less of an issue. Rental rates and utilization are okay. Used pricing remains fairly stable. Dealer inventory overall remains healthy however some dealers with slightly too much inventory are shipping equipment to dealers where demand is still stronger. Overseas, the European demand forecast is reiterated at flat to down 5%. Demand in China remains more challenged relative to last quarter and the pricing environment is competitive. Indonesia was also weaker versus last quarter tied to mining. With regards to 2020, while it is early to provide an outlook, most expect flat to down 5% but reiterated overall demand is at healthy levels. There are no signs of markets overheating broadly.

Overall, Caterpillar has underperformed the broad markets, with the stock up 6% year to date. In the past 52 weeks, the stock is down 3%.

A few analysts weighed in on Caterpillar prior to the release:

• Atlantic Securities has an Underweight rating.
• Macquarie has a Sell rating and a $115 price target.
• Standpoint Research has a Buy rating.
• UBS Group has a Sell rating with a $115 target.

Shares of Caterpillar traded up 1.5% to $137.23 on Tuesday, in a 52-week range of $112.06 to $159.37. The stock has a consensus price target of $147.13.