Caterpillar Reports 20% Retail Machine Sales Drop; RBC Cautious - Yahoo Finance

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Caterpillar Inc (CAT) has reported worldwide rolling three-month retail machine sales -20% y/y from -23% in June, with declines softening in Construction and Resource.

As was the case in June, all regions were in minus- the one exception being the Asia/ Pacific region (+10% versus +14% in June). Declines did moderate though, with North America down 35% from -38% in June, Latin America -5% from -25% in June and EAME -11% from -18%.

Meanwhile three-month rolling energy and transportation (E&T) sales to retail users and OEMs declined 16% y/y in July versus an 18% decrease in June.

The moderation was driven by Power Gen, up 8% in July versus flat in June and Transportation, down 26% vs a 47% June. The decline in Oil & Gas came in at 19% in July from -18% in June with Industrial at -43% from -40% in June.

“Rolling three-month retail sales for July remained under pressure (as expected), albeit with moderating declines in Machines and E&T” commented RBC Capital’s Seth Weber on the news.

“Whereas we believe CAT is better positioned relative to prior cycles, we expect NT end user demand/margin trends to remain relatively subdued” he concluded.

And as visibility to a quick upward turn in end market demand remains limited, the analyst maintained his hold rating on the stock with a $130 price target. (See CAT stock analysis on TipRanks)

Shares in Caterpillar are down 5% year-to-date, and analysts have a cautiously optimistic Moderate Buy consensus on the stock’s outlook. That’s with a $141 average analyst price target– indicating shares will stay flat at current levels.