[it's over, ch. 11, give it up, move on -ed]
In pre-market trade the stock is down 1.85% at $76.33.
From Notable Calls:
Morgan Stanley is downgrading Joy Global (NASDAQ:JOYG) to Underweight from Equal-Weight with a $71 price target (prev. $64). The moves comes after Caterpillar announced the acquisition of Bucyrus, JOYG's main competitor.
Conclusion: Morgan Stanley is downgrading JOYG shares to Underweight; risk reward is not favorable and the frim thinks it’s a good time to take profits. They remain very bullish on the mining cycle but prefer CAT for mining exposure. Their ‘11 and’12 ests are 3% and 11% below cons, even after bumping their up a bit. Near-term they see few pos catalysts, with potential downside from underwhelming orders. Longer term the firm expects more hydraulics gain and see CAT as a tougher competitor.
Morgan Stanley sees 3 effects from CAT's bid for BUCY, none of them positive for JOYG
1) JOYG shares appreciated 7% on CAT's bid for BUCY, presumably on the attractiveness of JOYG as a unique asset for strategics or investors. In fact, they think the opposite should've happened, to the extent a bid from CAT was in the JOYG share price a potential positive is off the table. CAT’s bid for BUCY was 14x MSCO's 2012 est (15x cons); JOYG currently trades at 15x their 2012 est, and almost 14x consensus 2012....
...Notablecalls: Call makes sense. JOYG traded 8 million shares yesterday, which means there are trapped longs there....MORE