Analysts rate Caterpillar Inc. (CAT:NYE) with a Buy rating and a $216 target

STA Research
by: STA Research
Caterpillar Inc

Analysts rate Caterpillar Inc. (CAT:NYE) with a consensus Buy rating and an average CAT stock price target of $216.90 per share over the next 12 months.

Based on the Caterpillar stock forecast from 13 analysts, the average analyst CAT stock price target is USD 216.90 over the next 12 months. Caterpillar Inc’s average analyst rating is Buy. Stock Target Advisor’s own stock analysis of CAT stock forecast is Slightly Bullish, which is based on 8 positive signals and 5 negative signals. At the last closing, Caterpillar stock price was USD 189.49Caterpillar stock price has changed by +8.66% over the past week, -1.23% over the past month and -7.57% over the last year.

 

About Caterpillar Inc. (CAT:NYE):

Caterpillar Inc. manufactures and sells construction and mining equipment, diesel and natural gas engines, and industrial gas turbines worldwide. Its Construction Industries segment offers asphalt pavers, backhoe loaders, compactors, cold planers, compact track and multi-terrain loaders, excavators, etc.

The Resource Industries segment provides electric rope shovels, draglines, hydraulic shovels, rotary drills, hard rock vehicles, track-type tractors, mining trucks, longwall miners, wheel loaders, off-highway trucks, etc. The Energy & Transportation segment offers reciprocating engines, generator sets, integrated systems and solutions, turbines and turbine-related services.

The company’s Financial Products segment provides operating and finance leases, installment sale contracts, working capital loans, and wholesale financing plans. The company was formerly known as Caterpillar Tractor Co. and changed its name to Caterpillar Inc. in 1986. The company was founded in 1925 and is headquartered in Deerfield, Illinois.

Most Recent Analyst Ratings for CAT’s stock price:

 

 

What we like:

High market capitalization:

This is one of the largest entities in its sector and is among the top quartile. Such companies tend to be more stable.

Superior risk-adjusted returns:

Caterpillar stock price has performed well, on a risk adjusted basis, compared to its sector peers (for a hold period of at least 12 months) and is in the top quartile.

Low volatility:

The stock’s annual returns have been stable and consistent compared to its sector peers (for a hold period of at least 12 months) and is in the top quartile. Although stability is good, also keep in mind it can limit returns.

Superior total returns:

Caterpillar stock price has outperformed its sector peers on average annual total returns basis in the past 5 years (for a hold period of at least 12 months) and is in the top quartile.

Superior return on equity:

The company management has delivered better return on equity in the most recent 4 quarters than its peers, placing it in the top quartile.

Positive cash flow:

The company had positive total cash flow in the most recent four quarters.

Positive free cash flow:

The company had positive total free cash flow in the most recent four quarters.

Superior Earnings Growth:

Caterpillar stock price has shown top quartile earnings growth in the previous 5 years compared to its sector.

 

What we don’t like:

Overpriced compared to book value:

CAT stock price is trading high compared to its peers median on a price to book value basis.

Overpriced on cashflow basis:

CAT stock price is trading high compared to its peers on a price to cash flow basis. It is priced above the median for its sectors. Proceed with caution if you are considering to buy.

Highly leveraged:

The company is in the bottom half compared to its sector peers on debt to equity and is highly leveraged. However, do check the CAT stock forecast and look at its sector and management statements. Sometimes this is high because the company is trying to grow aggressively.

Overpriced on free cash flow basis:

CAT stock price is trading high compared to its peers on a price to free cash flow basis. It is priced above the median for its sectors. Proceed with caution if you are considering to buy.

Low Revenue Growth:

CAT stock price has shown below median revenue growth in the previous 5 years compared to its sector

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