Thursday, April 14, 2011

Can (CAT) (TXT) (UTX) (ETN) (HON) (GE) Meet Expectations?

As evidenced by the recent 6 percent plunge in share price of Alcoa (NYSE:AA), even after beating expectations, U.S. manufacturers such as General Electric Co (NYSE:GE), Caterpillar Inc (NYSE:CAT) and Textron Inc (NYSE:TXT), United Technologies Corp (NYSE:UTX), Eaton Corp (NYSE:ETN) and Honeywell International Inc (NYSE:HON) will be under pressure to perform as investors remain jittery about the economy.

Growth has been decent over the last year, but the artificial stimulation coming from quantitative easing is about to end, and questions of whether or not the companies can sustain themselves are already on the periphery of the minds of investors.

There is uncertainty about the sustainability of the so-called recovery around the world, and with so many negative catalysts creating economic pressure, it's no a surety by any means manufacturers will continue to grow at the level they recently have.

Manufacturers will also have to deal with recent success as well, which appears to be slowing in growth, which will weigh on the stocks if there aren't positive catalysts to balance off the negative.

In other words, it's going to be hard to impress shareholders going forward, and that will probably pressure many manufacturer share prices.

No comments: