Caterpillar (NYSE:CAT) Shares Down 2.4% - Should You Sell?

Key Points

• Caterpillar shares fell 2.4% to $584.28 in Tuesday trading, with volume 36% above the average session volume.
• Anthropic reportedly agreed to take over 1.7 gigawatts of Caterpillar generators in a deal worth about $3.4 billion, highlighting potential demand from AI data centers’ growing power needs.
• Analysts’ consensus rating is Moderate Buy, with an average price target of $898.25, though recent target changes were mixed. Caterpillar’s latest quarterly EPS of $7.20 beat estimates, while revenue of $20.68 billion was slightly below expectations.

Caterpillar Inc. (NYSE:CAT - Get Free Report)'s stock price dropped 2.4% during trading on Tuesday. The company traded as low as $566.12 and last traded at $584.2760. 3,973,760 shares were traded during trading, an increase of 36% from the average session volume of 2,914,452 shares. The stock had previously closed at $598.88.

Caterpillar News Roundup

Here are the key news stories impacting Caterpillar this week:

• Positive Sentiment: Anthropic reportedly agreed to take over 1.7 gigawatts of Caterpillar gas generators originally ordered by OnePWR, in a deal valued at about $3.4 billion. The order highlights how AI data centers’ growing power needs could support demand for Caterpillar’s power-generation equipment. Article: Caterpillar Is the Quiet Winner in Anthropic’s IPO
• Positive Sentiment: Caterpillar appeared on a list of stocks insiders are buying after the recent market sell-off. Insider purchases can signal confidence, though the article excerpt does not provide the size or details of the transactions. Article: Caterpillar Is Amongst the Notable Names Insiders Are Loading Up On
• Neutral Sentiment: Michael Burry reportedly trimmed his bearish CAT options position after the puts rose substantially in value. That reduces the size of one prominent bearish bet, but does not necessarily indicate a bullish view on the shares. Article: Michael Burry trims Caterpillar bearish bet
• Negative Sentiment: Technical coverage says CAT’s broader trend remains weak, despite its recent rebound. That leaves the stock vulnerable to continued volatility and may help explain pressure on shares even amid the AI-power demand story. Article: Caterpillar stock support and resistance levels after 5.8% rebound

Wall Street Analyst Weigh In

Several brokerages recently issued reports on CAT. JPMorgan Chase & Co. lowered their target price on Caterpillar from $1,100.00 to $1,000.00 and set an "overweight" rating for the company in a research report on Friday, October 30th. Barclays increased their price target on Caterpillar from $800.00 to $900.00 and gave the company an "equal weight" rating in a research note on Thursday, August 6th. DA Davidson cut their price objective on Caterpillar from $882.00 to $685.00 and set a "neutral" rating on the stock in a research note on Monday, November 2nd. Citigroup reduced their target price on Caterpillar from $950.00 to $800.00 and set a "buy" rating on the stock in a report on Friday, October 30th. Finally, Zacks Research downgraded shares of Caterpillar from a "strong-buy" rating to a "hold" rating in a research report on Monday, October 5th. Fifteen investment analysts have rated the stock with a Buy rating and twelve have given a Hold rating to the company's stock. According to data from MarketBeat.com, Caterpillar has a consensus rating of "Moderate Buy" and an average target price of $898.25.

Caterpillar Trading Down 2.4%

The firm has a 50-day moving average of $756.16 and a 200 day moving average of $806.00. The company has a market cap of $268.57 billion, a P/E ratio of 22.92, a price-to-earnings-growth ratio of 1.02 and a beta of 1.65. The company has a current ratio of 1.42, a quick ratio of 0.88 and a debt-to-equity ratio of 1.50.

Caterpillar (NYSE:CAT - Get Free Report) last announced its quarterly earnings data on Thursday, October 29th. The industrial products company reported $7.20 EPS for the quarter, beating analysts' consensus estimates of $7.06 by $0.14. The firm had revenue of $20.68 billion during the quarter, compared to analysts' expectations of $20.76 billion. Caterpillar had a return on equity of 59.87% and a net margin of 15.21%. The company's revenue for the quarter was up 17.3% compared to the same quarter last year. During the same quarter last year, the firm posted $4.95 earnings per share. On average, analysts predict that Caterpillar Inc. will post 27.39 earnings per share for the current fiscal year.

Caterpillar Announces Dividend

The company also recently disclosed a quarterly dividend, which will be paid on Thursday, November 19th. Investors of record on Monday, October 26th will be issued a $1.63 dividend. The ex-dividend date of this dividend is Monday, October 26th. This represents a $6.52 annualized dividend and a yield of 1.1%. Caterpillar's dividend payout ratio (DPR) is 25.58%.

Insiders Place Their Bets

In other news, CEO Joseph E. Creed sold 32,401 shares of the firm's stock in a transaction that occurred 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 transaction, the chief executive officer directly owned 34,555 shares in the company, valued at approximately $27,954,303.90. This trade represents a 48.39% decrease in their ownership of the stock. The transaction was disclosed in a legal filing with the Securities & Exchange Commission, which can be accessed through the SEC website. Also, Director C Jr bought 1,000 shares of the firm's stock in a transaction that occurred on Monday, November 2nd. The shares were purchased at an average cost of $620.39 per share, for a total transaction of $620,390.00. Following the acquisition, the director directly owned 4,714 shares in the company, valued at $2,924,518.46. This trade represents a 26.93% increase in their position. The SEC filing for this purchase provides additional information. Insiders own 0.33% of the company's stock.

Institutional Inflows and Outflows

Several large investors have recently made changes to their positions in the business. BlackRock Inc. bought a new stake in shares of Caterpillar in the 2nd quarter worth approximately $40,457,153,000. State Street Corp raised its holdings in shares of Caterpillar by 4.0% during the second quarter. State Street Corp now owns 36,276,960 shares of the industrial products company's stock valued at $37,120,529,000 after acquiring an additional 1,396,356 shares in the last quarter. Bank of America Corp DE bought a new position in shares of Caterpillar during the second quarter valued at approximately $5,818,150,000. Bank of New York Mellon Corp purchased a new stake in Caterpillar in the second quarter worth $3,192,710,000. Finally, Legal & General Group Plc purchased a new stake in Caterpillar in the second quarter worth $2,783,451,000. 70.98% of the stock is owned by hedge funds and other institutional investors.

Caterpillar Company Profile

Caterpillar Inc. is a global manufacturer of construction and mining equipment, engines, turbines, and related products and services. Its offerings include earthmoving and material-handling machines, diesel and natural gas engines, power-generation systems, and equipment and technologies used in mining and transportation. The company's products are commonly sold under the Cat brand. Caterpillar serves customers in markets around the world through a network of independent dealers. Its businesses also provide parts, maintenance, equipment rental, and other support services, as well as financing and insurance through its financial services operations.

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