How to trade Caterpillar (CAT) stock after Q4 earnings

What's Happening With CAT View more about CAT >

Heavy machinery maker Caterpillar (CAT) reports fourth-quarter earnings before the market open January 28. The consensus calls for earnings of $2.98 per share versus $2.16 during the same period last year. CAT stock is flat since the end of June.

Technical Analysis

CAT was recently trading at $135.97 down $37.13 from its 12-month high and $23.91 above its 12-month low. InvestorsObserver’s Stock Score Report gives CAT a 67 long-term technical score and a 64 short-term technical score. The stock has recent support above $120 and recent resistance below $140. Of the 17 analysts who cover the stock 9 rate it Strong Buy, 1 rate it Buy, 7 rate it Hold, 0 rate it Sell, and 0 rate it Strong Sell, CAT gets a score of 63 from InvestorsObserver’s Stock Score Report.

Analysts' Thoughts

Caterpillar is an important report to watch as it provides insight into the construction and housing markets. CAT sold off following last quarter’s report despite posting positive surprises on both the top and bottom line. The reason for the selloff was the company’s warning that it was experiencing supply chain problems due to increased demand. The stock has been stable since the selloff but faces solid resistance at the $140 level. The stock cooled off in 2018 after a very bullish two year run as investors feared the overall impact on the company from rising interest rates. The stock has moved higher since the Federal Reserve announced it expected one less interest rate hike in 2019, and the stock looks very attractively priced with a forward P/E of under 11.

The low valuation coupled with analysts expecting profits to rise 25 percent per annum over the next five years makes the stock attractive, but with so much uncertainty in housing and lingering fears of an economic slowdown on the horizon the stock will need to post very strong numbers for shares to enjoy a post-earnings rally. The street is looking for an earnings beat with a whisper number of $3.03 for the quarter. Analysts see significant upside in the stock with an average price target of $162.71.

CAT
About Caterpillar Inc.

Caterpillar is an iconic manufacturer of heavy equipment, power solutions, and locomotives. It is currently the world's largest manufacturer of heavy equipment with approximately 16% of global market share in 2017. The company is divided into four reportable segments: construction industries, resource industries, energy & transportation, and Caterpillar Financial Services. Its products are available through a dealer network that covers the globe with 2,163 branches maintained by 168 dealers. Caterpillar Financial Services provides financing to its customers and dealers.

  • Last Price:
    $136.23
  • Previous Close:
    $133.86
  • Change:
    $2.37 (1.77%)
  • Open:
    $134.22
  • Volume:
    4,799,714
  • Average Volume (100 Day):
    4,135,965
  • Market Capitalization:
    $77.9 B
  • Day's Range:
    $134.22 - $137.05
  • Dividend Yield:
    3.05%
  • 52-week Range:
    $159 - $112.06
  • P-E:
    12.50
  • EPS:
    $10.76
  • Earnings Date:
    7/24/19
  • Ex Dividend Date:
    7/19/19
  • Sector:
    Industrials
  • Industry:
    Farm & Construction Equipment
  • Analyst Average Recommendation:
    Moderate Buy

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