Caterpillar (NYSE:CAT) Stock Falls 5% - Here's What Happened

Key Points

• Caterpillar shares fell 5% to about $703.30 in mid-day trading, with volume slightly above average. The stock remains below its 50-day and 200-day moving averages.
• Despite the decline, analysts and company fundamentals remain broadly positive: Caterpillar reported quarterly earnings and revenue well above estimates, maintains a $72 billion backlog, and has a consensus price target of $967.83, implying substantial upside.
• The company declared a quarterly dividend of $1.63, or $6.52 annualized, yielding approximately 0.9%. Analyst sentiment is “Moderate Buy,” though ratings include both upgrades and a recent downgrade to “Hold.”

Caterpillar Inc. (NYSE:CAT - Get Free Report) traded down 5% on Thursday. The stock traded as low as $695.33 and last traded at $703.2980. Approximately 3,044,472 shares changed hands during mid-day trading, an increase of 8% from the average session volume of 2,822,256 shares. The stock had previously closed at $740.21.

Trending Headlines about Caterpillar

Here are the key news stories impacting Caterpillar this week:

• Positive Sentiment: Wall Street expects earnings growth in Caterpillar’s upcoming report, and the company’s history of earnings surprises, combined with favorable estimate revisions and a positive Earnings ESP setup, points to potential for another beat. Caterpillar Reports Next Week: Wall Street Expects Earnings Growth
• Positive Sentiment: Analysts see a possible near-term turnaround after a recent decline, citing a hammer chart pattern that may indicate support and broad upward revisions to earnings estimates. Bears Are Losing Control Over Caterpillar
• Positive Sentiment: Caterpillar continues to benefit from strong cash flow, a record $72 billion backlog and a raised 2026 sales-growth outlook. The unchanged dividend still reflects ongoing capital-return support, although investors are watching for a future increase. CAT Keeps Dividend Unchanged
• Positive Sentiment: Brokerage data cited a consensus price target of $967.83, implying analysts remain substantially more optimistic than the recent trading level. Caterpillar Consensus Target Price

Analyst Ratings Changes

Several analysts have weighed in on the company. UBS Group upped their target price on Caterpillar from $900.00 to $925.00 and gave the company a "neutral" rating in a report on Wednesday, August 5th. DA Davidson lifted their price target on Caterpillar from $845.00 to $882.00 and gave the stock a "neutral" rating in a research note on Thursday, August 6th. Zacks Research lowered shares of Caterpillar from a "strong-buy" rating to a "hold" rating in a research report on Monday, October 5th. Freedom Broker upgraded shares of Caterpillar from a "hold" rating to a "buy" rating and set a $980.00 target price for the company in a report on Thursday, September 10th. Finally, Wall Street Zen upgraded shares of Caterpillar from a "hold" rating to a "buy" rating in a research report on Saturday, October 10th. Fifteen equities research analysts have rated the stock with a Buy rating and twelve have assigned a Hold rating to the company's stock. According to data from MarketBeat, Caterpillar has an average rating of "Moderate Buy" and a consensus target price of $967.83.

Caterpillar Price Performance

The company has a debt-to-equity ratio of 1.65, a current ratio of 1.37 and a quick ratio of 0.85. The firm has a market capitalization of $323.29 billion, a PE ratio of 30.26, a P/E/G ratio of 1.24 and a beta of 1.58. The company has a 50-day moving average price of $802.23 and a 200-day moving average price of $856.84.

Caterpillar (NYSE:CAT - Get Free Report) last posted its quarterly earnings data on Tuesday, August 4th. The industrial products company reported $8.17 EPS for the quarter, topping analysts' consensus estimates of $6.22 by $1.95. The firm had revenue of $20.54 billion during the quarter, compared to analysts' expectations of $19.34 billion. Caterpillar had a return on equity of 55.53% and a net margin of 14.51%. The firm's quarterly revenue was up 23.7% compared to the same quarter last year. During the same quarter last year, the business posted $4.72 EPS. Sell-side analysts forecast that Caterpillar Inc. will post 27.74 EPS for the current year.

Caterpillar Dividend Announcement

The firm also recently disclosed a quarterly dividend, which will be paid on Thursday, November 19th. Stockholders of record on Monday, October 26th will be given a $1.63 dividend. The ex-dividend date of this dividend is Monday, October 26th. This represents a $6.52 dividend on an annualized basis and a dividend yield of 0.9%. Caterpillar's payout ratio is currently 28.06%.

Insider Buying and Selling

In related news, CEO Joseph E. Creed sold 32,401 shares of the stock in a transaction dated Friday, August 28th. The stock was sold at an average price of $808.98, for a total transaction of $26,211,760.98. Following the transaction, the chief executive officer directly owned 34,555 shares in the company, valued at approximately $27,954,303.90. This represents a 48.39% decrease in their ownership of the stock. The transaction was disclosed in a filing with the SEC, which can be accessed through this hyperlink. Insiders own 0.33% of the company's stock.

Institutional Trading of Caterpillar

A number of hedge funds have recently added to or reduced their stakes in CAT. Decker Retirement Planning Inc. grew its holdings in Caterpillar by 440.0% in the second quarter. Decker Retirement Planning Inc. now owns 27 shares of the industrial products company's stock valued at $29,000 after purchasing an additional 22 shares during the period. Matrix Trust Co increased its position in Caterpillar by 93.8% during the second quarter. Matrix Trust Co now owns 31 shares of the industrial products company's stock worth $33,000 after purchasing an additional 15 shares during the last quarter. Axiom Investment Management LLC purchased a new position in Caterpillar during the second quarter worth approximately $36,000. Lam Group Inc. purchased a new position in Caterpillar during the first quarter worth approximately $26,000. Finally, PFS Partners LLC boosted its holdings in shares of Caterpillar by 1,750.0% in the 3rd quarter. PFS Partners LLC now owns 37 shares of the industrial products company's stock valued at $30,000 after purchasing an additional 35 shares during the last quarter. 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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