UPDATE: Goldman Sachs Downgrades Joy Global to Neutral on Lack of Visibility

In a report published Wednesday, Goldman Sachs analyst Jerry Revich downgraded the rating on Joy Global (NYSE: JOY) from Buy to Neutral, and lowered the price target from $72.00 to $60.00.

In the report, Goldman Sachs noted, “Our Buy rating had been predicated on (1) strong aftermarket demand, (2) stable equipment share of capex, and (3) social contract opportunities. We remain constructive on accelerating cash return to shareholders and forecast $1.3 bn of buyback and dividends by the end of 2015E (23% of market cap). However, we now expect EPS to stabilize in 2014E (2013E prior) as we underestimated declines in mining equipment share of capex in 2014-15E, and while relative valuation is attractive, we believe visibility on a sustained commodity recovery is requisite to narrow the valuation gap. We reduce our estimates and price target, and downgrade Joy to Neutral. Since being added to the Buy List on 7/6/11, JOY is -44% vs. the S&P 500 +22%.”

Joy Global closed on Tuesday at $53.76.