Industrials Week In Review: Johnson Controls, Deere, Caterpillar and 3M

Industrial company’s such as Johnson Controls (NYSE:JCI), Deere (NYSE:DE), Caterpillar (NYSE: CAT) and 3M (NYSE:MMM) have had a very busy week. We discuss some of the weekly news for these conglomerates below.

Johnson Controls makes appointments to senior management positions

Johnson Controls has made some internal promotions that have led to a reshuffling of its senior management. It has appointed Bruce McDonald, earlier executive vice president and chief financial officer, as its executive vice president and vice chairman. ^[1] Brian Stief will be taking his place as the executive vice president and chief financial officer. Johnson Controls appointed Suzanne Vincent vice president, corporate controller. ^[2] Prior to this, she was the vice president, Internal Audit. The company’s board appointed Grady L. Crosby as vice president public affairs and chief diversity officer. He is succeeding Charles A. Harvey who is retiring from the company at the end of the calendar year.

Johnson Controls’ stock declined 3.97% over the week through Thursday, to reach $44.65. On average, the stock traded on a volume 2.68 million shares. The stock has traded at a 52-week high of $52.5 and low of $39.42.

We currently have a price estimate of $52 for Johnson Controls, approximately 16% higher than its current market price. We estimate revenues of $44.1 billion and EPS of $3.25 for this fiscal year 2014, in line with consensus estimates.

Click here to see our complete analysis of Johnson Controls

Deere puts crop insurance business under strategic review

On September 23, 2014, Deere announced that it will review strategic options for its crop insurance business, a part of its John Deere Insurance Company. ^[3] Citi has been retained as the financial adviser. Deere has been involved in selling business units that are not in line with its core strategy. It recently sold off a 40% stake in John Deere Landscape and a 100% stake in John Deere Water.

Deere’s stock declined 0.63% over the week through Thursday, to reach $83.13. On average, the stock traded on a volume 3.80 million shares. The stock has traded at a 52-week high of $94.89 and low of $80.76.

We currently have a price estimate of $95.7 for Deere, 15% higher than its current market price. We estimate revenues of $34.78 billion for the calendar year 2014 and EPS of $8.50 for fiscal year 2014, in line with consensus estimates.

Click here to see our complete analysis of Deere

Caterpillar to invest in the Global Poverty Project

Caterpillar announced that it will invest $2.5 million the Global Poverty Project, a project which aims to end extreme poverty by the year 2030. ^[4] The investment will help provide access to sanitation and basic education for the poor. The Global Poverty Project estimates that sanitation will help the entrepreneurial spirit of women and girls around the world and enable them to achieve and education.

Caterpillar’s stock declined 2.89% over the week through Thursday, to reach $99.51. On average, the stock traded on a volume 4.75 million shares. The stock has traded at a 52-week high of $111.46 and low of $81.87.

We currently have a price estimate of $109 for Caterpillar, approximately 9.5% higher than its current market price. We estimate revenues of $55.93 billion, compared to consensus estimate of $55.12 billion, and EPS of $6.15 for the fiscal year 2014, compared to consensus estimate of $6.28.

Click here to see our complete analysis of Caterpillar

3M introduces Post-it Plus App

On September 25, 2014, 3M launched an app for its most popular product, Post-it Notes. ^[5] The app can capture up to fifty square Post-it Notes and stores them in a digital format which can later on be organized and shared. Post-it Plus App is presently only available on Apple’s App Store and is compatible with iOS 8 devices.

3M’s stock declined 2.88% over the week through Thursday, to reach $142.48. On average, the stock traded on a volume 2.08 million shares. The stock has traded at a 52-week high of $147.87 and low of $116.65.

We currently have a price estimate of $142 for 3M, in line its current market price. We estimate revenues of $32.34 billion and EPS of $7.39 for this fiscal year, in line with consensus estimates.

Click here to see our complete analysis of 3M

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1. Johnson Controls appoints Bruce McDonald executive vice president and vice chairman, September 23, 2014, www.johnsoncontrols.com [↩]
2. Johnson Controls appoints Suzanne Vincent vice president, corporate controller, September 23, 2014, www.johnsoncontrols.com [↩]
3. Deere to Review Strategic Options for Crop Insurance Business, September 23, 2014, www.deere.com [↩]
4. Caterpillar Invests $2.5 Million to End Extreme Poverty, September 25, 2014, www.caterpillar.com [↩]
5. New Post-it Plus App Brings Post-it Note Collaboration Experience into the Digital World, September 25, 2014, www.3m.com [↩]