Morningstar Rating

Stock Research and Analysis

by Kwame Webb, CFA

Bulls Say

Recent bad debt challenges at Joy’s Chinese mining competitors Sany and Zoomlion could open the door for Joy to gain additional market share in China, a country that produces 50% of global coal output, and 30% of global iron ore production.
Joy’s emphasis in offering lifetime equipment management programs should increase its base business of aftermarket service sales.
The LeTourneau and Mining Technologies International deals smartly expand Joy’s product offerings into loading equipment and hard-rock underground mining. Read more 

Bears Say

Roughly 60% of Joy’s sales are tied to coal mining, which faces severe regulatory headwinds in both the U.S. and China.
Caterpillar’s Bucyrus acquisition and captive financing arm give it the unique combination of the world’s broadest product portfolio and the ability to offering financing incentives, which Joy cannot offer. We think this gives Caterpillar the upper-hand in sales.
As commodity demand has receded, Joy’s customers have insourced a larger portion of their equipment servicing. Read more 

Management

We give Joy Global a Standard stewardship rating. It has maintained relatively high returns on invested capital (greater than 10% by the end of 2014) despite seeing a 35% revenue decline during the 2012 through 2014 time period. We are also impressed   Read more 

Profile

Milwaukee-based Joy Global manufactures electric shovels, dragline excavators, drills, and other mining equipment for use in surface (through its P&H brand) and underground   Read more 

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