SALOMON RAISES CATERPILLAR <CAT> OPINION
Salomon Brothers Inc said it raised
its opinion on Caterpillar Inc's stock to an aggressive buy
from a hold because of a brighter earnings outlook for 1988.
    Salomon analyst David Sutliff said in a statement he sees
1988 earnings of 3.35 dlrs a share, up from an earlier forecast
of three dlrs for the year. The outlook for 1987 remains at
2.50 dlrs to three dlrs.
    Caterpillar's stock was down 1/2 points at 46-1/4.
    "Although earnings will be poor for the next two quarters,
we believe that profits could begin to improve in the second
half - perhaps significantly - and should surge sharply through
1988 and 1989," he said.
    Sutliff said improved results should come from four factors
- higher prices, improved market share, reduced costs, and
improved demand.
    The higher prices will stick because its Japanese
competitor, Komatsu, has had to raise prices because of the
increased value of the yen, he said.
 Reuter
