What happened to Caterpillar's stock in January?
Caterpillar ( CAT 0.53% ) stock's solid rally in the last quarter of 2019 had rekindled investor hopes of a long-awaited recovery in the company's prospects. The month of January, unfortunately, dashed hopes as shares of the heavy-equipment manufacturer slumped 11.1%, according to data from S&P Global Market Intelligence .
Is Caterpillar’s (cat) stock a buy at $219?
In the latest trading session, Caterpillar (CAT) closed at $219.75, marking a +0.77% move from the previous day. We are currently in the expansion stage of our business cycle, which means that we have more capacity with many opportunities to grow. Thus, it is an excellent time for industrial companies and their underlying stocks to thrive.
Is the Caterpillar Case still bullish?
The slowdown in China's growth has pressured the stock. There's still a bullish case to be made for the Caterpillar. Welcome to the wonderful world of highly cyclical stocks! Just as their earnings tend to oscillate wildly, so do their stock prices.
Is Caterpillar stock trading at a premium to its peers?
Looking at its valuation, Caterpillar is holding a Forward P/E ratio of 18.02. Its industry sports an average Forward P/E of 15.7, so we one might conclude that Caterpillar is trading at a premium comparatively.
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Why did CAT stock fall?
Caterpillar stock (NYSE: CAT) has seen a fall of 9% over the last month, due to fears of recession and its impact on the company's business, after a solid financial performance over the last few quarters, driven by surging demand for industrial equipment and a better pricing environment.
What is the forecast for Caterpillar stock?
Stock Price Forecast The 23 analysts offering 12-month price forecasts for Caterpillar Inc have a median target of 227.00, with a high estimate of 350.00 and a low estimate of 161.00. The median estimate represents a +30.99% increase from the last price of 173.30.
Is Caterpillar stock a buy sell or hold?
Is CAT Stock A Buy, Sell, or Hold? CAT stock is a Hold. Caterpillar's shares have already outperformed the S&P 500 by a substantial margin so far this year, and my price target for CAT does not imply sufficient upside to warrant a Buy rating.
Is Caterpillar buying back stock?
Still, Caterpillar (ticker: CAT) announced a new share repurchase authorization of $15 billion, which works out to about 13% of the company's market capitalization. The cash won't be spent all at once. For instance, the prior authorization was granted by the board back in 2018 and was for $10 billion.
Is it a good time to buy Caterpillar stock?
Caterpillar's current payout ratio is 41%. This means it paid out 41% of its trailing 12-month EPS as dividend. CAT is expecting earnings to expand this fiscal year as well. The Zacks Consensus Estimate for 2022 is $12.32 per share, representing a year-over-year earnings growth rate of 13.97%.
Is CAT a strong buy?
Its Value Score of B indicates it would be a good pick for value investors. The financial health and growth prospects of CAT, demonstrate its potential to outperform the market. It currently has a Growth Score of C.
Is CAT stock undervalued?
Now 21% undervalued after recent price drop.
How high will Chevron stock go?
Stock Price Forecast The 26 analysts offering 12-month price forecasts for Chevron Corp have a median target of 181.00, with a high estimate of 213.00 and a low estimate of 150.00. The median estimate represents a +31.55% increase from the last price of 137.59.
Is Caterpillar a dividend aristocrat?
Caterpillar (CAT), the world's largest maker of heavy construction and mining equipment, was added to the Dividend Aristocrats in January 2019.
Is Caterpillar stock a Buy, Sell or Hold?
Caterpillar stock has received a consensus rating of buy. The average rating score is A2 and is based on 27 buy ratings, 7 hold ratings, and 13 sel...
What was the 52-week low for Caterpillar stock?
The low in the last 52 weeks of Caterpillar stock was 179.67. According to the current price, Caterpillar is 124.06% away from the 52-week low.
What was the 52-week high for Caterpillar stock?
The high in the last 52 weeks of Caterpillar stock was 246.58. According to the current price, Caterpillar is 90.40% away from the 52-week high.
What are analysts forecasts for Caterpillar stock?
The 47 analysts offering price forecasts for Caterpillar have a median target of 200.21, with a high estimate of 273.00 and a low estimate of 101.0...
What is fair value in accounting?
What stocks outperform the S&P 500?
Fair Value is the appropriate price for the shares of a company, based on its earnings and growth rate also interpreted as when P/E Ratio = Growth Rate. Estimated return represents the projected annual return you might expect after purchasing shares in the company and holding them over the default time horizon of 5 years, based on the EPS growth rate that we have projected.
Who is the CEO of Siemens?
With the ongoing expansion in manufacturing activity, it is prudent to invest in stocks like CAT, DE, SEE, BERY and GEF that are outperforming the S&P 500 and are set to gain further.
When looking at a dividend stock, do we need to form a judgement?
Siemens U.S. CEO Barbara Humpton joins Yahoo Finance Live from the White House lawn to discuss President Biden signing the new infrastructure legislation into law.
Does Astec gain from backlog?
When we look at a dividend stock, we need to form a judgement on whether the dividend will grow, if the company is able to maintain it in a wide range of economic circumstances, and if the dividend payout is sustainable.
Who is the CEO of blink charging?
While Astec (ASTE) will gain from a higher backlog, higher steel prices, supply-chain issues and labor constraints will likely hurt results.
Who is Heather Boushey?
Blink Charging CEO Michael Farkas speaks with Yahoo Finance's Live Karina Mitchell about the features of its electrical vehicle charging system and what the infrastructure bill's impact will be on the industry.
What does YOY mean in Caterpillar presentations?
Heather Boushey, Member of the White House Council of Economic Advisers, joins Yahoo Finance’s Karina Mitchell to discuss the rise in retail sales, labor shortage, infrastructure, and the Build Back Better plan.
How much will caterpillar's EV/EBITDA drop in 2021?
Data source: Caterpillar presentations. YOY = year over year. Chart by author.
Does Lee Samaha have a position in any of the stocks mentioned?
Wall Street analysts are forecasting that Caterpillar's EV/EBITDA multiple will drop to 15.6 times EBITDA in 2021, 13.4 times EBITDA in 2022, and 12.3 times EBITDA in 2023. However, as the chart below shows, those valuations are pretty high for Caterpillar at peak EBITDA, so it appears that the market is pricing in a multi-year recovery.
Is third quarter profit margin lower than second quarter?
Lee Samaha has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
Does rising raw material prices affect machinery manufacturers?
Starting with raw material costs, CFO Andrew Bonfield said during the earnings call that the third-quarter profit margin would "moderate" from the second quarter. Furthermore, he went on to note, "we do expect higher manufacturing costs, which means that our gross margin percentage will be moderately lower in the second half of the year versus the first half."
Is rising raw material prices a positive?
Rising raw material prices have pressured margins at machinery manufacturers, and Caterpillar and others are seeing rising costs.
What happened
That's arguably a net positive for Caterpillar's revenue generation, and once the company starts pushing through price increases, its margin should improve.
Now what
Shares of industrial stalwart Caterpillar (NYSE: CAT) fell as much as 10% in early trading Monday before recovering (a bit) to close the day down 9.1%.
What is Neha's favorite pastime?
Problem is, that run of amazing earnings growth Cat posted in 2018 appears to be coming to an end. Caterpillar warned that after growing 20% in 2018, sales growth will only be "modest" in 2019 -- basically confirming Wall Street expectations, which has Caterpillar down for just 6.5% growth in the new year.
How much did caterpillar lose in 2019?
Her favorite pastime: Digging into 10Qs and 10Ks to pull out important information about a company and its operations that an investor may otherwise not know. Other days, you may find her decoding the big moves in stocks that catch her eye. Check back at Fool.com for her articles, or follow her on Twitter. Follow @nehamschamaria
Is caterpillar a global company?
Caterpillar's revenue fell 8% year over year in the fourth quarter and 2% in 2019 to $53.8 billion, and management projects sales will decline further in 2020.
Is caterpillar facing headwinds?
Caterpillar is a hugely diversified company with a wide global presence, which is why its struggle for growth has been somewhat confusing. In its construction equipment business, for example, Caterpillar expects sales from China to be flat to down 5%, and sales from Europe, Africa, and the Middle East to be flat to "slightly up" at best in 2020. Expectations from its resource industries segment, which primarily manufactures mining equipment, is equally muted as mining companies across the globe have kept the purse strings tight on capital spending. Resource industries was Caterpillar's weakest segment in Q4, with total sales declining 14% year over year.
Is volatility in commodity prices a challenge?
In short, Caterpillar is facing several headwinds, most of which are macro factors beyond the company's control.
What will determine Caterpillar's fortunes?
Volatility in commodity prices, in fact, proved to be the biggest challenge for not just mining, but also oil and gas producers in 2019 -- it hit energy stocks hard. Caterpillar expects the trend to continue, which is why it expects lower demand from its energy and transportation segment in 2020.
Does Lee Samaha have a position in any stocks?
Ultimately, Caterpillar's fortunes will be decided by the shape of the global industrial recovery and in particular the recovery in construction and infrastructure spending, as well as capital spending in the mining and energy sectors.
Is Caterpillar's dividend payout sustainable?
Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer. Lee Samaha has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
Is caterpillar giving earnings guidance for 2020?
Therefore, even if Caterpillar isn't quite able to hit that free cash flow target, the $2.3 billion dividend payout still looks easily sustainable. In addition, the market is expecting a significant improvement in sales and earnings next year.
Why Caterpillar's Stock Declined
Raw Material Costs
- Starting with raw material costs, CFO Andrew Bonfield said during the earnings call that the third-quarter profit margin would "moderate" from the second quarter. Furthermore, he went on to note, "we do expect higher manufacturing costs, which means that our gross margin percentage will be moderately lower in the second half of the year versus the first half." That's a disappointment, a…
Growth in China
- Usually, with cyclical stocks, each region of the world tends to operate in tandem. However, COVID-19 originated in China and then spread to the rest of the world, meaning that China's growth trend has fallen out of step. As you can see below, the Asia/Pacific region recovered quicker than Europe and North America. The China economy was hit the hardest in the first quar…
valuation Concerns
- Valuing a cyclical stock is always tricky. Not least because it sometimes makes sense to buy cyclical stockson a high valuation and sell on a low valuation. They tend to trade on a high valuation precisely when earnings bottom and then take off. The cycle continues until they trade on low valuations at peak earnings, just as earnings start declining. You can see these dynamic…
The Bulls' Case
- In response, it's worth highlighting a few points. First, rising raw material prices are an issue, but they stem from the fact that construction activity is strong, and so is energy and mining demand. That's arguably a net positive for Caterpillar's revenue generation, and once the company starts pushing through price increases, its margin should improve. Second, the worries over China's gr…