Why is Caterpillar’s stock price falling?
The stock price of Caterpillar has seen a decline of 6% over the last five trading days. The recent decline can be attributed to rising concerns of slowing growth in China if Evergrande - China’s largest real-estate firm with over $300 billion in debt - were to default.
Why did Caterpillar stock take a dive Friday?
Shares of Caterpillar Inc. took a dive Friday, as surging costs and a disappointing outlook on profit margins overshadowed a big quarterly earnings beat.
Why is the market worrying about caterpillar's machine sales in Asia?
Meanwhile, year-over-year growth in Europe and North America is surging as those regions are coming up against very weak comparisons with 2020. In a nutshell, the market appears to be worrying about the fall in the year-over-year growth rate in Caterpillar's machine retail sales in Asia.
Is caterpillar's growth slowing in China?
China's year-over-year growth may be slowing, but that's largely down to the fact that it recovered before Europe and the Americas. The reality is Caterpillar's sales are still forecast to grow by 18% in 2021 and 11.5% in 2022.
Why are Caterpillar shares dropping?
Caterpillar Stock Falls As Traders Focus On Rising Costs The company reported revenue of $13.8 billion and adjusted earnings of $2.69 per share, beating analyst estimates on both earnings and revenue. While the headline numbers were strong, the market focused on cost headwinds which put pressure on margins.
Is Caterpillar stock a good investment?
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 Caterpillar 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....About CAT.SymbolLast Price% ChgCATPost217.14 216.521.95% -0.29%Apr 25, 2022
What is the future of Caterpillar stock?
Based on 16 Wall Street analysts offering 12 month price targets for Caterpillar in the last 3 months. The average price target is $240.93 with a high forecast of $282.00 and a low forecast of $164.00. The average price target represents a 25.13% change from the last price of $192.55.
Is CAT overvalued?
PB vs Industry: CAT is overvalued based on its Price-To-Book Ratio (6x) compared to the US Machinery industry average (2x).
Is CAT stock undervalued?
In our previous update on Caterpillar CAT -1.1% , we maintained our view that CAT stock is undervalued, and the dip following its Q4 release can be used as a buying opportunity.
Will CAT stock go back up?
The 23 analysts offering 12-month price forecasts for Caterpillar Inc have a median target of 240.00, with a high estimate of 350.00 and a low estimate of 164.00. The median estimate represents a +7.68% increase from the last price of 222.89.
Should I sell my CAT stock?
Caterpillar(CAT-N) Rating Stockchase rating for Caterpillar is calculated according to the stock experts' signals. A high score means experts mostly recommend to buy the stock while a low score means experts mostly recommend to sell the stock.
Is Caterpillar a good dividend stock?
Caterpillar has increased its dividend 4 times on a year-over-year basis over the last 5 years for an average annual increase of 9.19%.
What is Zacks rating of CAT?
Price and Volume InformationZacks Rank52 Week High237.9052 Week Low179.67Beta0.9420 Day Moving Average2,683,257.002 more rows
What is the target price for Disney?
Stock Price TargetHigh$176.00Low$110.00Average$143.26Current Price$95.71
What is the target price for Microsoft?
Stock Price TargetsHigh$410.00Median$350.00Low$298.18Average$353.56Current Price$244.97
How much is caterpillar's backlog?
How much did the cost of sales increase in 2019?
At the end of the second quarter of 2019, Caterpillar’s backlog was at $15 billion, a sequential drop of $1.9 billion. For 2019, Caterpillar maintains adjusted earnings per share guidance of $11.75-$12.75. Including a 31 cents per share discrete tax benefit related to U.S. tax reform, the guidance is at $12.06-$13.06.
What stocks outperform the S&P 500?
In second-quarter 2019, cost of sales increased 5.5% year over year to $9.9 billion on higher manufacturing costs owing to higher variable labor and burden, and warranty expenses and higher material costs, including tariffs. Gross profit dropped 2.1% to $4.49 billion on higher manufacturing costs.
When looking at a dividend stock, do we need to form a judgement?
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.
Do stocks crash without warning?
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.
Management is betting that margin pressures will be temporary and supply chain bottlenecks will ease
Stock market crashes often occur without warning. For that reason, investors should remain prepared for the next one. One of the best ways to do that is have a list of stocks to buy when the market starts melting down.
Referenced Symbols
Shares of Caterpillar Inc. took a dive Friday, as surging costs and a disappointing outlook on profit margins overshadowed a big quarterly earnings beat.
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 b…
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…