Caterpillar (NYSE:CAT) Shares Climb 2.1% - Still a Buy?

Key Points

• Caterpillar shares rose 2.1% to about $740.20, despite trading below their 50-day and 200-day moving averages. The stock carries a “Moderate Buy” consensus rating and an average analyst price target of $967.83.
• Investors remain optimistic about Caterpillar’s outlook because of its strong earnings-surprise record, $72 billion backlog, improving sales expectations, and recent Zacks upgrade to “Buy.” The company’s latest quarter also significantly exceeded EPS and revenue estimates.
• Risks include a relatively high valuation, ETF selling pressure, CEO Joseph Creed’s sale of roughly $26.2 million in shares, and the company’s unchanged quarterly dividend of $1.63 per share, equivalent to a 0.9% yield.

Shares of Caterpillar Inc. (NYSE:CAT - Get Free Report) shot up 2.1% on Wednesday. The company traded as high as $745.00 and last traded at $740.1980. Approximately 2,069,507 shares traded hands during mid-day trading, a decline of 27% from the average daily volume of 2,818,685 shares. The stock had previously closed at $725.24.

Caterpillar News Roundup

Here are the key news stories impacting Caterpillar this week:

• Positive Sentiment: Caterpillar’s strong earnings-surprise history, combined with favorable estimates and an expected positive Earnings ESP, supports expectations for another quarterly earnings beat. Will Caterpillar Beat Estimates Again in Its Next Earnings Report?
• Positive Sentiment: Although CAT’s dividend was left unchanged, the company’s strong cash flow, record $72 billion backlog and higher 2026 sales-growth outlook support the possibility of a future dividend increase and reinforce the investment case. CAT Keeps Dividend Unchanged: Is Another Hike on the Horizon?
• Positive Sentiment: Zacks upgraded Caterpillar to Rank #2, or “Buy,” citing improving earnings prospects. The average broker target of $967.83 also implies substantial upside from the referenced trading level, though targets are not guarantees. Caterpillar Rating Upgrade to Buy
• Neutral Sentiment: An IronSight AI and Fast Iron partnership will help dealers of Caterpillar, Komatsu and Volvo equipment identify and sell used parts using smartphone-based image recognition. The announcement may improve dealer efficiency, but it does not represent direct revenue guidance for CAT. IronSight AI and Fast Iron Partnership
• Neutral Sentiment: A Fresno contractor’s planned retirement auction of Caterpillar equipment is a localized resale event and is unlikely to materially affect Caterpillar’s financial results. Fresno Contractor Caterpillar Equipment Auction
• Negative Sentiment: ETFs were reported as net sellers of CAT, indicating some institutional selling pressure. Separately, commentary warning about a potential future decline highlights valuation and market-risk concerns. ETFs Are Net Sellers of Caterpillar
• Negative Sentiment: Caterpillar objected to unauthorized tokenized versions of its shares on an unregistered crypto platform. The dispute does not change CAT’s fundamentals, but could create regulatory and reputational concerns. Caterpillar Objects to Tokenized Trading

Analysts Set New Price Targets

A number of equities analysts recently commented on the company. Citigroup reduced their price objective on Caterpillar from $1,100.00 to $950.00 and set a "buy" rating on the stock in a research report on Monday, October 12th. Royal Bank Of Canada raised their price objective on shares of Caterpillar from $877.00 to $897.00 and gave the stock a "sector perform" rating in a research report on Wednesday, August 5th. DA Davidson lifted their price target on shares of Caterpillar from $845.00 to $882.00 and gave the company a "neutral" rating in a research report on Thursday, August 6th. Barclays upped their price objective on Caterpillar from $800.00 to $900.00 and gave the company an "equal weight" rating in a report on Thursday, August 6th. Finally, Erste Group Bank lowered Caterpillar from a "buy" rating to a "hold" rating in a research report on Monday, July 27th. Fifteen investment analysts have rated the stock with a Buy rating and twelve have given a Hold rating to the stock. According to MarketBeat, the stock currently has an average rating of "Moderate Buy" and a consensus price target of $967.83.

Caterpillar Stock 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 stock has a market capitalization of $340.25 billion, a price-to-earnings ratio of 31.85, a price-to-earnings-growth ratio of 1.25 and a beta of 1.58. The firm's fifty day moving average price is $807.63 and its 200 day moving average price is $856.77.

Caterpillar (NYSE:CAT - Get Free Report) last announced its earnings results on Tuesday, August 4th. The industrial products company reported $8.17 earnings per share (EPS) for the quarter, beating analysts' consensus estimates of $6.22 by $1.95. Caterpillar had a return on equity of 55.53% and a net margin of 14.51%. The company had revenue of $20.54 billion for the quarter, compared to analyst estimates of $19.34 billion. During the same quarter in the previous year, the company earned $4.72 earnings per share. The firm's quarterly revenue was up 23.7% compared to the same quarter last year. Analysts forecast that Caterpillar Inc. will post 27.49 EPS for the current fiscal year.

Caterpillar Announces Dividend

The firm also recently announced a quarterly dividend, which will be paid on Thursday, November 19th. Investors of record on Monday, October 26th will be paid a dividend of $1.63 per share. The ex-dividend date is Monday, October 26th. This represents a $6.52 annualized dividend and a yield of 0.9%. Caterpillar's payout ratio is presently 28.06%.

Insider Transactions at Caterpillar

In related news, CEO Joseph E. Creed sold 32,401 shares of the company's stock in a transaction on Friday, August 28th. The shares were sold at an average price of $808.98, for a total value of $26,211,760.98. Following the completion of the sale, the chief executive officer owned 34,555 shares in the company, valued at $27,954,303.90. This represents a 48.39% decrease in their position. The transaction was disclosed in a document filed with the Securities & Exchange Commission, which is available through the SEC website. 0.33% of the stock is owned by corporate insiders.

Institutional Investors Weigh In On Caterpillar

Several hedge funds have recently modified their holdings of the stock. Decker Retirement Planning Inc. raised its stake in shares of Caterpillar by 440.0% during the 2nd quarter. Decker Retirement Planning Inc. now owns 27 shares of the industrial products company's stock worth $29,000 after purchasing an additional 22 shares in the last quarter. Matrix Trust Co raised its holdings in shares of Caterpillar by 93.8% during the 2nd quarter. Matrix Trust Co now owns 31 shares of the industrial products company's stock valued at $33,000 after purchasing an additional 15 shares in the last quarter. Axiom Investment Management LLC bought a new position in shares of Caterpillar during the 2nd quarter valued at $36,000. Lam Group Inc. acquired a new stake in shares of Caterpillar in the 1st quarter valued at $26,000. Finally, Tacita Capital Inc bought a new stake in Caterpillar in the second quarter worth $47,000. 70.98% of the stock is owned by institutional investors and hedge funds.

Caterpillar Company Profile

Caterpillar Inc is a manufacturer of construction, mining, and industrial equipment. Its product portfolio includes excavators, bulldozers, wheel loaders, motor graders, articulated trucks, and other machinery used in construction, infrastructure development, mining, quarrying, forestry, and related industries. The company also produces diesel and natural gas engines, industrial gas turbines, generator sets, and other power-generation and transportation equipment.

Caterpillar operates through businesses focused on construction industries, resource industries, and energy and transportation.

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