UPDATE: Longbow Research Reiterates Buy Rating on Caterpillar

In a report published Friday, Longbow Research analyst Eli Lustgarten Reiterated a Buy rating with a $104 PT for Caterpillar Inc. (NYSE: CAT).

Lustgarten noted that 3Q13 saw a healthy demand with a strong focus on the compact equipment demand. Construction sales remain up, with 66% of Longbow's contacts reporting a demand increase. The analyst's sample estimates described an average US dealer growth estimate in the mid-single digits this quarter. The report commented that much of the sales growth on a y/y comparison is from private commercial and residential profits.

Longbow commented on the lack of commentary on quarterly price movements. The analyst wrote, "Some contacts did note a price increase is expected as the company moves from Interim Tier 4 to Final Tier 4, consistent with CAT's announced price increases for 2014 of 0% to 2% plus 2% to 6% for emissions."

Lustgarten commented that he remains optimistic and expects 63% growth in 4Q13 with a 33% flat forecast. Longbow maintained FY2013 EPS of $6.25 versus consensus of $6.24. The analyst slightly increased his construction forecast and lowered the mining estimate. Lustgarten lowered FY2014 EPS estimates from $7.40 to $7.20 (versus consensus of $7.09), taking into account reduced mining estimates.

Caterpillar shares closed at $85.85 on Thursday and is currently trading +1.78% at $87.38.