By: Rob Wertheimer
Pretty much everyone we’ve spoken with expects Cat to issue a conservative guide along with its 4Q earnings report; consensus has revenue down 3%, op profit down 6%, and earnings down 2-4%. Some folks are more bearish on mining, some on oil/gas, some on construction destock, and we wouldn’t be surprised if the overall expectation is for Cat to guide below consensus… especially with coronavirus adding to the uncertainty. We do still get questions within that conservative expectation on when the dealer destock might end. We address that in this note, along with the reason for our well above consensus estimates.