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Citi said after they caught up with senior leaders at several of CAT’s North American dealer groups, feedback pointed to demand out-running supply.
“The feedback on demand was generally positive, but supply challenges persist, and show little sign of abatement,” Citi wrote. “Competition looks set to intensify in NA as more foreign supply is attracted by a strong USD and relatively solid demand picture. This cycle is proving to be unique in many respects, but we continue to view 2023 as the most likely peak for CAT earnings. The feedback we heard from dealers supports this view.”
Commenting on demand signals, Thein explained that customer sentiment remains mostly positive, but residential was cited consistently as the “one area where pockets of weakness have emerged in recent
With rising mortgage rates and inflation impacting potential buyers, many investors expect the residential housing market to slow down significantly.
“This has not crept into commercial construction, but this is clearly at risk as rates rise, and given the normal lag to resi. Oil & gas remains positive, with heavier rebuild schedules and some newbuild orders helping to support optimism into 2023,” Citi wrote.
Caterpillar shares are up 2.4% at the time of writing.
By Sam Boughedda