Jefferies Turns Bullish On Caterpillar, Raises Price Target By 21%

Jefferies analyst Stephen Volkmann upgraded Caterpillar Inc CAT to Buy from Hold and raised the price target to $260 (an upside of 26%) from $215.
Volkmann's prior Hold rating had been based on concerns that constrained CAPEX and ESG themes in mining and oil and gas markets that accounted for about 40% of Caterpillar revenue, leading to much more modest cyclical growth than in past cycles.
Volkmann now believes the Russia/Ukraine crisis has "fundamentally altered global commodity markets" and will likely drive a decade of reinvestment.
After years of underinvestment, capacity additions and supply diversification will be necessary for the mining and oil and gas sectors, driving structurally higher pricing, stated the analyst.
Price Action: CAT shares are trading higher by 4.87% at $206.28 on the last check Tuesday.

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