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Gordon Johnson On Caterpillar: 'Macro Backdrop Is Worsening, Not Getting Better'

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Axiom analyst Gordon Johnson focused on Caterpillar Inc. (NYSE: CAT)'s three-month rolling machines sales figure in an email to investors Thursday morning. Caterpillar reported a nearly 40 percent drop in Energy and Transport sales year-over-year.

Johnson contextualized the results against a global economic picture that seems increasingly unfriendly, noting Fed uncertainty and current OPEC talks of an oil price freeze as macro concerns.

"The point is, the macro backdrop is worsening, not getting better," Johnson wrote. "We believe the current down-cycle is more structural than the last (i.e., supply-driven compared to the last down-cycle, which was demand-driven)."

Johnson believes the macro picture will force Caterpillar to adjust its financials.

"We feel the company will have to cut its earnings guidance multiple times this year," Johnson concluded.

Caterpillar's total worldwide machine sales figure has dropped by around 10 percent almost every month since early 2013.

Caterpillar shares were down about 2.45 percent at $65.55 late Thursday morning.

Latest Ratings for CAT

DateFirmActionFromTo
Apr 2021Deutsche BankMaintainsBuy
Apr 2021Wolfe ResearchInitiates Coverage OnOutperform
Apr 2021Morgan StanleyMaintainsUnderweight

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