Caterpillar rises after China data, Piper Jaffray upgrade

theflyonthewall.com

Caterpillar (CAT) is advancing after China reported better than expected economic data earlier today, and a research firm upgraded the stock. China's fourth quarter GDP growth and its retail sales and industrial output for December all slightly exceeded analysts' expectations. China accounts for only a few percent of Caterpillar's revenue but had been seen as a growth engine for the company before slowing last year. In a note to investors earlier today, Piper Jaffray analyst Alexander Potter upgraded Caterpillar to Overweight from Neutral. Investors' concerns about a build-up of machine inventory in China and shaky demand for mining equipment due to a reduced appetite for raw materials in that country have faded, Potter believes, after conducting extensive research. The better than expected Chinese data and strong U.S. housing starts provide additional support for this thesis, according to the analyst, who raised his price target on Caterpillar to $113 from $85. In late morning trading, Caterpillar rose 0.43% to $96.11.

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