Caterpillar (NYSE:CAT) Shares Down 3.1% - Should You Sell?

Key Points

• Caterpillar shares fell 3.1% to about $814.69 in mid-day trading, with volume 37% above the average session level.
• The company reported a strong quarter, with EPS of $8.17 versus estimates of $6.22 and revenue up 23.7% year over year to $20.54 billion. Analysts project continued growth, and Zacks raised its long-term earnings estimates while maintaining a “Strong Buy” rating.
• Analyst sentiment remains positive overall, with a consensus “Moderate Buy” rating and a $995.52 price target. Caterpillar also increased its quarterly dividend to $1.63, although its valuation remains elevated at a P/E ratio of 35.06.

Caterpillar Inc. (NYSE:CAT - Get Free Report)'s stock price dropped 3.1% during mid-day trading on Wednesday . The stock traded as low as $805.68 and last traded at $814.6850. Approximately 3,994,005 shares traded hands during mid-day trading, an increase of 37% from the average session volume of 2,919,715 shares. The stock had previously closed at $840.87.

Caterpillar News Summary

Here are the key news stories impacting Caterpillar this week:

• Positive Sentiment: Zacks Research raised multiple long-term earnings estimates, including FY2027 EPS to $30.14 from $29.01 and FY2028 EPS to $35.97 from $34.31. The firm also increased estimates for several quarterly periods and maintained a “Strong-Buy” rating, signaling confidence in Caterpillar’s future profitability. Zacks Research estimates
• Positive Sentiment: Caterpillar’s volume-driven growth across its three business segments has prompted an improved 2026 sales outlook, supporting the view that strong demand and the company’s backlog remain important growth drivers. Caterpillar volume gains article
• Positive Sentiment: Caterpillar announced up to $3 million for an Arkansas workforce initiative as part of its five-year, $100 million Building the Future Workforce Initiative. The program could strengthen recruiting and manufacturing talent pipelines over time. Caterpillar Arkansas workforce initiative

Analyst Ratings Changes

Several equities research analysts have recently commented on the company. HSBC boosted their price objective on Caterpillar from $850.00 to $1,100.00 in a report on Tuesday, May 5th. Barclays boosted their price target on shares of Caterpillar from $800.00 to $900.00 and gave the company an "equal weight" rating in a research note on Thursday, August 6th. Oppenheimer restated an "outperform" rating and set a $1,118.00 price objective on shares of Caterpillar in a report on Tuesday, August 4th. JPMorgan Chase & Co. raised their price objective on shares of Caterpillar from $1,125.00 to $1,165.00 and gave the company an "overweight" rating in a research note on Wednesday, June 17th. Finally, Weiss Ratings reissued a "buy (b-)" rating on shares of Caterpillar in a research report on Wednesday, August 5th. One analyst has rated the stock with a Strong Buy rating, thirteen have given a Buy rating and eleven have given a Hold rating to the company's stock. According to data from MarketBeat, the company has an average rating of "Moderate Buy" and a consensus price target of $995.52.

Caterpillar Price Performance

The company has a current ratio of 1.37, a quick ratio of 0.85 and a debt-to-equity ratio of 1.65. The firm has a market capitalization of $374.49 billion, a PE ratio of 35.06, a price-to-earnings-growth ratio of 1.53 and a beta of 1.60. The business has a 50-day moving average of $913.03 and a 200 day moving average of $830.99.

Caterpillar (NYSE:CAT - Get Free Report) last posted its earnings results on Tuesday, August 4th. The industrial products company reported $8.17 earnings per share (EPS) for the quarter, topping the consensus estimate of $6.22 by $1.95. Caterpillar had a net margin of 14.51% and a return on equity of 55.53%. The firm had revenue of $20.54 billion during the quarter, compared to analyst estimates of $19.34 billion. During the same quarter in the prior year, the business posted $4.72 EPS. The business's revenue was up 23.7% compared to the same quarter last year. As a group, research analysts anticipate that Caterpillar Inc. will post 26.56 EPS for the current fiscal year.

Caterpillar Increases Dividend

The firm also recently announced a quarterly dividend, which will be paid on Wednesday, August 19th. Stockholders of record on Monday, July 20th will be paid a $1.63 dividend. This represents a $6.52 dividend on an annualized basis and a dividend yield of 0.8%. The ex-dividend date is Monday, July 20th. This is a boost from Caterpillar's previous quarterly dividend of $1.51. Caterpillar's dividend payout ratio (DPR) is presently 28.06%.

Institutional Trading of Caterpillar

A number of hedge funds have recently bought and sold shares of the business. Axxcess Wealth Management LLC boosted its stake in Caterpillar by 2.8% during the fourth quarter. Axxcess Wealth Management LLC now owns 22,420 shares of the industrial products company's stock valued at $12,844,000 after buying an additional 604 shares during the last quarter. Juno Financial Group LLC bought a new stake in Caterpillar in the 4th quarter worth approximately $877,000. DSG Capital Advisors LLC purchased a new stake in shares of Caterpillar during the 1st quarter worth approximately $1,226,000. Cornerstone Planning LLC bought a new stake in Caterpillar in the fourth quarter worth $4,517,000. Finally, Ticino Wealth bought a new position in shares of Caterpillar during the 4th quarter worth $2,488,000. 70.98% of the stock is currently owned by institutional investors.

About Caterpillar

Caterpillar Inc is a global manufacturer of construction and mining equipment, diesel and natural gas engines, industrial gas turbines and locomotives. The company's product portfolio includes earthmoving machines such as excavators, bulldozers, wheel loaders and off‑highway trucks, as well as a range of power generation products including generator sets and power systems for industrial and commercial use. Caterpillar serves customers across heavy construction, mining, energy, transportation and related industries with both equipment and integrated technology solutions.

In addition to manufacturing, Caterpillar provides a broad range of aftermarket parts and support services, including maintenance, repair, remanufacturing and fleet management tools.

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