Caterpillar’s (CAT) Q4 earnings may trail market expectations as recent data indicate “fundamental headwinds” not fully reflected in the consensus, UBS Securities said Thursday in a report.
The heavy equipment manufacturer is scheduled to report Q4 results Monday with UBS projecting earnings at $4.51 a share, compared with Wall Street’s $4.75 consensus.
“URI, Volvo and Komatsu December quarter results leave us with increased conviction in our view that momentum in the business is slowing,” UBS said. “For Q4, we have a cautious fundamental bias into the print, but investors should be prepared for the possibility of short covering post-Q4 results,” given Caterpillar’s crowded short position, the report said.
UBS increased its price target on Caterpillar to $240 from $209 and maintained its sell rating.
Caterpillar shares rose 1.6% in recent Thursday trading.