Caterpillar (NYSE:CAT) Trading Down 1.8% - What's Next?

Key Points

• Caterpillar shares fell 1.8% in midday trading, with the stock last changing hands at $864.72 after trading as low as $861.27. Volume was below average, signaling lighter-than-normal activity.
• Analysts remain generally positive on the company, with multiple firms recently raising price targets; MarketBeat says Caterpillar has a consensus rating of Moderate Buy and an average target of $980.57.
• The company posted strong quarterly results and also increased its dividend to $1.63 per share from $1.51, though insider selling and the stock's premium valuation may be weighing on sentiment.

Shares of Caterpillar Inc. (NYSE:CAT - Get Free Report) dropped 1.8% during mid-day trading on Monday . The company traded as low as $861.27 and last traded at $864.7150. Approximately 2,443,115 shares traded hands during trading, a decline of 16% from the average session volume of 2,893,761 shares. The stock had previously closed at $880.28.

Analyst Ratings Changes

A number of analysts have recently commented on the company. Weiss Ratings restated a "buy (b-)" rating on shares of Caterpillar in a report on Friday, May 8th. Rothschild & Co Redburn lifted their target price on Caterpillar from $700.00 to $950.00 and gave the company a "neutral" rating in a research report on Thursday, May 14th. Citigroup boosted their target price on Caterpillar from $1,020.00 to $1,100.00 and gave the company a "buy" rating in a research note on Tuesday, July 14th. Robert W. Baird raised their price target on shares of Caterpillar from $1,165.00 to $1,200.00 and gave the stock an "outperform" rating in a research note on Friday, June 26th. Finally, JPMorgan Chase & Co. lifted their price objective on shares of Caterpillar from $1,125.00 to $1,165.00 and gave the company an "overweight" rating in a report on Wednesday, June 17th. Fifteen investment analysts have rated the stock with a Buy rating and ten have issued a Hold rating to the company. According to MarketBeat, the company currently has a consensus rating of "Moderate Buy" and a consensus price target of $980.57.

Caterpillar Trading Down 1.8%

The firm has a market cap of $398.28 billion, a price-to-earnings ratio of 43.04, a P/E/G ratio of 1.72 and a beta of 1.57. The company has a debt-to-equity ratio of 1.64, a current ratio of 1.35 and a quick ratio of 0.81. The business has a 50-day moving average of $931.29 and a 200-day moving average of $794.97.

Caterpillar (NYSE:CAT - Get Free Report) last issued its quarterly earnings results on Thursday, April 30th. The industrial products company reported $5.54 EPS for the quarter, beating the consensus estimate of $4.65 by $0.89. The firm had revenue of $17.41 billion during the quarter, compared to analysts' expectations of $16.53 billion. Caterpillar had a return on equity of 48.21% and a net margin of 13.33%.The business's quarterly revenue was up 22.2% compared to the same quarter last year. During the same period in the prior year, the firm posted $4.25 earnings per share. Research analysts anticipate that Caterpillar Inc. will post 24.87 EPS for the current year.

Caterpillar Increases Dividend

The business also recently disclosed a quarterly dividend, which will be paid on Wednesday, August 19th. Stockholders of record on Monday, July 20th will be issued a $1.63 dividend. This represents a $6.52 annualized dividend and a dividend yield of 0.8%. The ex-dividend date of this dividend is Monday, July 20th. This is a boost from Caterpillar's previous quarterly dividend of $1.51. Caterpillar's payout ratio is currently 30.06%.

Insider Buying and Selling at Caterpillar

In other news, CFO Andrew R. J. Bonfield sold 15,674 shares of Caterpillar stock in a transaction dated Wednesday, May 6th. The shares were sold at an average price of $918.71, for a total value of $14,399,860.54. Following the completion of the transaction, the chief financial officer owned 52,935 shares of the company's stock, valued at $48,631,913.85. This trade represents a 22.85% decrease in their position. The sale was disclosed in a legal filing with the SEC, which is available at this link. Also, insider Lange Bob De sold 24,222 shares of the business's stock in a transaction dated Wednesday, May 6th. The stock was sold at an average price of $922.92, for a total transaction of $22,354,968.24. Following the transaction, the insider owned 86,029 shares in the company, valued at $79,397,884.68. This represents a 21.97% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. Insiders sold 95,773 shares of company stock valued at $87,642,635 in the last 90 days. Company insiders own 0.33% of the company's stock.

Institutional Investors Weigh In On Caterpillar

Hedge funds have recently bought and sold shares of the company. Axxcess Wealth Management LLC increased its holdings 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 worth $12,844,000 after buying an additional 604 shares during the last quarter. Juno Financial Group LLC purchased a new position in Caterpillar in the fourth quarter valued at about $877,000. DSG Capital Advisors LLC purchased a new position in Caterpillar in the first quarter valued at approximately $1,226,000. Cornerstone Planning LLC bought a new position in Caterpillar during the fourth quarter valued at $4,517,000. Finally, Ticino Wealth bought a new position in Caterpillar during the fourth quarter valued at $2,488,000. 70.98% of the stock is currently owned by institutional investors and hedge funds.

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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