Don't Worry, Caterpillar's Market Share Is Stable

In a report published Thursday, Deutsche Bank analyst Vishal Shah maintained a Buy rating on

, with a price target of $95, after the company maintained its market share despite a decline in excavator sales in China. CCMA reported that July excavator sales in China had declined to 3,003 units, marking a 35 percent y/y decline, as compared to a 41 percent decline in June and a 27 percent decline a year ago. Caterpillar's sales were down 29 percent y/y in July, as compared to a 9 percent decline a year ago. Analyst Vishal Shah added, however, that the company's market share had remained unchanged, at 12.5 percent. In the report Deutsche Bank noted, "Channel checks made by our China Construction Equipment team suggest that most dealers expect 2015 full year sales to drop significantly and that demand will not pick up until 2H16. In addition, many dealers observed that overdue ratio rose in the past few months due to delayed payments from constructors and limited project starts due to harvest season." Shah commented that sales trends in the Chinese excavator segment indicated that the construction machinery segment had continued to be in a down cycle, adding that continued decline in excavator sales could result in a higher-than-anticipated decline in Caterpillar's construction equipment sales in the Asia Pacific region.