Caterpillar (CAT) has high hopes for 2012, supported by strong demand for mining and machinery equipment from India, China and other emerging markets.

Management says it will continue to expand production levels next year, when it expects sales and revenue to grow by 20%. Caterpillar is very bullish about the growth prospects in China in particular, where it's expanding production capacity. It mainly competes with Deere and Co. (DE), Komatsu, Terex (TEX) and Cummins (CMI).

Caterpillar is coming off a strong third quarter in which it hit record revenue of $15.7 billion, a 41% increase over a year earlier. Profits soared 44% to $1.4 billion. The stock price was down nearly 2% Tuesday to $95.16 in morning trading.

Our complete analysis for Caterpillar's stock is here

CAT expects growth in 2012

Caterpillar's order backlog at the end of the third quarter was at an all-time high of $17.4 billion, with strong growth prospects from emerging countries. It expects growth in developing countries in 2012 will be similar to 2011.

The company expects to end 2011 with sales of $58 billion, up from $42 billion in 2010. For 2012, Caterpillar expects revenue to grow by 20% as it expands production while commodity prices recede. However, slow growth is expected in developed markets due to the overall economic slowdown and the European debt crisis.

China investments continue

Caterpillar will expand production in half of its 16 Chinese factories as demand for infrastructure and housing lead to more demand for heavy construction equipment. However, the company continues to face competition from small players such as Japan's Komatsu and China's Sany Heavy, Zoomlion and Xugon.

While we estimate Caterpillar's share of the global machinery market will remain at 32% to 33% over our forecast period, *Trefis members project an increase from 36.5% in 2012 to 41%. The members' estimates imply an upside of 16% to the Trefis price estimate for Caterpillar's stock.

We currently have a Trefis price estimate of $100 for Caterpillar's stock, about 6% above the current market price.

*Trefis members constitute more than tens of thousands of users of the Trefis platform, inclusive of investors, financial analysts, and business professionals who use the Trefis platform to create their own models and price estimates.