Will Joy Global Bounce Back in 2013?

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As 2013 begins, now's a good time to look at the future prospects for the stocks you own. If you don't know where a company's headed in the next year and beyond, then it's impossible to make an informed decision about whether you should add the stock to your portfolio -- or sell it if you already own it.

Today, I'll look at Joy Global (NYSE: JOY  ) . Joy Global didn't bring investors much joy in 2012 because of the overall weakness in commodities markets throughout the year, but some are pointing to better times ahead. Below, you'll learn more about Joy Global's prospects for 2013.

Stats on Joy Global

Average Stock Target Price


Fiscal 2013 EPS Estimate


Fiscal 2014 EPS Estimate


Fiscal 2013 Sales Growth Estimate


Fiscal 2014 Sales Growth Estimate


Forward P/E


Source: Yahoo Finance.

Can Joy Global recover in 2013?
After significant losses in 2012, analysts feel somewhat more upbeat about the prospects for Joy Global shareholders this year. The current price target equates to about a 15% gain from the stock's price right now. Yet a continuing pullback in earnings will force any gains to come through multiple expansion, with no relief expected on the revenue front until next year.

The big question mark for Joy Global in 2013 comes from China. With the company going up against Caterpillar (NYSE: CAT  ) and Japanese giant Komatsu in the emerging-market nation, falling Chinese growth rates have taken their toll on the industry, with equipment remaining idle and big players like Rio Tinto (NYSE: RIO  ) cutting back on spending for the mining equipment that Joy Global sells.

But speculation over possible consolidation in the industry could boost Joy's prospects in 2013. Already, CEO Michael Sutherlin has responded to the idea that General Electric (NYSE: GE  ) may seek to expand its nascent mining equipment business and buy Joy Global, with Sutherlin hinting that a strong enough bid would make a deal possible. For now, though, the company's in no hurry to put itself up for sale.

Moreover, concerns that the commodity supercycle may be coming to an end seem overblown. Even if China keeps slowing down, Joy Global points to higher coal demand in India for power generation, which could help long-struggling Peabody Energy (NASDAQOTH: BTUUQ  ) and its coal peers recover and put them in a better position to buy Joy's equipment.

For 2013, Joy Global would love to see a stronger economy to bolster its results. Barring that, though, the company's still in a good position to take advantage of changing global trends and ongoing growth in far-flung parts of the globe.

Will Caterpillar be a kill-Joy?
Joy Global has made big inroads in mining equipment, but Caterpillar is still the market share leader in an industry in which size matters. Find out whether Caterpillar is the better buy by reading our premium report on the stock. Just click here to access it now.

Click here to add Joy Global to My Watchlist, which can find all of our Foolish analysis on it and all your other stocks.

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Related Tickers

9/28/2016 4:01 PM
JOY $27.76 Up +0.15 +0.54%
Joy Global CAPS Rating: ***
BTUUQ $1.52 Down -0.02 -1.30%
Peabody Energy Cor… CAPS Rating: *
CAT $86.59 Up +3.71 +4.48%
Caterpillar CAPS Rating: ***
GE $29.90 Up +0.02 +0.07%
General Electric CAPS Rating: ****
RIO $33.74 Up +1.51 +4.69%
Rio Tinto CAPS Rating: ***