0727 ET - Caterpillar equipment dealer Finning International is exposed to the general pullback in the economy and the pressure of lower commodity prices. National Bank of Canada's Maxim Sytchev notes that there has been a significant correlation between Finning's share price and a blended copper/WTI index since 2011, but "looking at the same correlation on a trailing two-year basis shows that it has almost disappeared over the last three years." He says that while management has done its best to de-risk its earnings profile "an outsized reliance on commodities makes Western Canada and Chile inherently cyclical economies." With the uncertainties of tariffs looming large, "commodity and general macro pullbacks will certainly weigh on earnings." NB downgrades the stock to sector perform. (adriano.marchese@wsj.com)
(END) Dow Jones Newswires
May 22, 2025 07:27 ET (11:27 GMT)
Copyright (c) 2025 Dow Jones & Company, Inc.