Shares of Caterpillar Inc. jumped 1.7% toward a record high in morning trade Monday, enough to pace the gainers within the Dow Jones Industrial Average , after the mining and farming equipment maker was upgraded at UBS, which cited a growing cash position and signs suggesting the earnings upcycle will continue. Analyst Steven Fisher raised his rating to buy, after being at neutral for at least the past three years. He raised his stock price target to $140, which was 13% above current levels, from $116. Fisher said UBS’s latest analysis of private non-residential construction suggests a re-acceleration in activity in the fourth quarter, with mid-single digit percentage growth into 2018. He said he believes Caterpillar will generate nearly $10 billion in cash flow between 2018 and 2020 after capital expenditures and dividends which can be strategically redeployed or returned to shareholders. “We think the cash story is particularly underappreciated, and will become more of a visible part of the investor dialogue going forward,” Fisher wrote in a note to clients. The stock has soared 15% over the past three months, while the SPDR Industrial Select Sector ETF has tacked on 1.3% and the Dow has gained 4.4%.
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