Stocks to watch at the open

Caterpillar feels the crunch of a mining sector slowdown, while investors will home in on Wesfarmers' sales numbers.


Bulldozer-maker Caterpillar’s outlook for the rest of the year does not bode well for industrial companies relying on the mining sector for contracts.

Caterpillar explained resource industries accounted for 75% of the decline in sales from the previous September quarter. There is little respite – Caterpillar is expecting resource industries to be down around 40% for the full year.

While earnings missed forecasts and analyst expectations, the forecast did the damage, sending Caterpillar down over 6%.

It will be interesting to see if Caterpillar dealer, Seven Group Holdings, can dust off the miserable forecast.

Wesfarmers (WES)

Wesfarmers is today reporting sales for the first quarter of this financial year.

The first half of this year has seen supermarket average sales grow at 3.6% year-on-year, seasonally adjusted. The final sales number for Coles will be used as a measure to gauge how the business is tracking against competitor Woolworths. If recent history is anything to go by, Coles should come out in front.

Beyond sales numbers, the market will be looking for operational improvements in the Coles business as the sector becomes increasingly competitive.

Across the discretionary side of Wesfarmers offering, it is expected Bunnings and Kmart will deliver sales growth, while Target will struggle as it undergoes restructuring.

InvestSMART FORUM: Come and meet the team

We're loading up the van and going on tour from April to June, with events on the NSW central & north coast, the QLD mid-north coast and in Perth, Adelaide, Melbourne, Sydney and Canberra. Come and meet the team and take home simple strategies that you can use to build an investment portfolio to weather any storm. Book your spot here.

Want access to our latest research and new buy ideas?

Start a free 15 day trial and gain access to our research, recommendations and market-beating model portfolios.

Sign up for free

Related Articles