JPMorgan’s iron and coal team are still bearish on coal and iron ore–and that doesn’t bode well for Joy Global (JOY). JPMorgan analysts Ann Duignan and Michael Conlon explain why:
ASSOCIATED PRESS Caterpillar's (CAT) mining business has already fallen from a peak of $21.2B to about $10.3B (-51%) whereas Joy Global's combined businesses have fallen 32% with its OE business down 57% and its service business down about 7% from peak. The key question from investors is whether Joy Global’s revenue has further to fall, especially its service business which has held up better than expected in FY'14. Lack of visibility makes it hard to call, but certainly deteriorating US thermal coal conditions skew the risk to the downside.
Shares of Joy Global have gained 0.5% to $61.88 at 11:41 a.m. today, while Caterpillar has risen 0.5% to $109.20. Good news out of China will do that.
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