Industrials Weekly Review: Caterpillar, Honeywell, Deere
During the past week Caterpillar (NYSE:CAT) released its retail statistics for the 3-month rolling period ended May, reporting declines across all three of its segments. Honeywell (NYSE:HON) announced that Virgin Atlantic will be the first airline to use its new flight management service. Deere (NYSE:DE) announced that it will be collaborating with King Agro for its application equipment.
Below is a quick rundown on the most notable events in the last week related to these companies.
Caterpillar
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Ongoing softness in mined commodities and oil prices continued to take its toll on Caterpillar. According to the company’s retail statistics for the 3-month rolling period ended May, the energy and transportation segment’s retail sales declined 6% year-on-year. [1] The company’s Construction Industries’ retail sales declined 14% over the same period. It is pertinent to note that the decline in retail sales has become steeper through the year, which indicates that the weakness in retail sales is likely to persist.
Despite Resource Industries retail sales continually declining for the past two years, there is a silver lining. According to Caterpillar’s retail statistics for the 3-month rolling period ended May, retail sales for the segment were down 8%, significantly moderate compared to the 46% decline witnessed a year ago. [2] It seems that the sales decline will likely bottom out soon.
Caterpillar’s stock declined 0.4 % over the week through Friday. We currently have a price estimate of $85 for Caterpillar. For 2015, we estimate revenues of $50 billion, compared to a consensus estimate of $49.3 billion, and EPS of $5.00, compared to a consensus estimate of $4.98.
Click here to see our complete analysis of Caterpillar
Honeywell
On June 15, Honeywell announced that Virgin Atlantic will be using its new flight management service for Airbus A330 and A340 fleet. [3] The new Honeywell Flight Management System (FMS) Datalink Service provides pilots with updated and customized wind and temperature information, which should lead to time and fuel savings.
Honeywell’s stock gained 1.2% over the week through Friday. We currently have a price estimate of $109 for Honeywell. For the year 2015, we estimate revenues of $39.6, compared to a consensus estimate of $39.4 billion, and EPS of $6.09, in line with consensus estimates.
Click here to see our complete analysis of Honeywell
Deere
On June 19, Deere announced that it will be collaborating with King Pro, a manufacturer of carbon fiber technology products, to develop and distribute carbon fiber booms exclusively for John Deere application equipment. [4] Carbon fiber booms help increase strength, durability and reduce weight of spraying equipment, making it easier to use.
Deere’s stock was relatively stagnant over the week through Friday. We currently have a price estimate of $92 for Deere. For the year 2015, we estimate EPS of $5.67, in line with consensus estimates.
Click here to see our complete analysis of Deere
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- 2015 YTD Retail Statistics, Caterpillar’s Website [↩]
- 2014 Retail Statistics, Caterpillar’s Website [↩]
- Honeywell Helps Virgin Atlantic Improve Fuel Efficiency With New Flight Management Service, June 15, 2015, Honeywell’s Press Release [↩]
- John Deere Announces Agreement with King Agro, June 19, 2015, Deere’s News Release [↩]