Caterpillar Inc. (NYSE: CAT), a key player in the Industrials sector, has been displaying some interesting technicals recently. Despite a net interest income loss of $443M and an income tax expense of $2.1B, the company posted a net income applicable to common shares of $6.7B. The stock's typical price for the day stands at $280.81, slightly above the 50-day moving average of $266.05. However, with a naive expected forecast value of $292.95 and a possible upside price of $294.61, there are indications that CAT could be poised for a rebound. The valuation real value is currently pegged at $300.37, with
analyst estimates ranging from a low of $208 to a high of $350. The overall
analyst consensus is a 'Hold', with 7 strong buys, 9 holds, and 2 strong sells. With a PE ratio of 20.83 and a short percent of 0.014, investors are keeping a close eye on this stock. Notably, the company's operating income stands at a robust
$7.9B, suggesting a strong financial footing despite some challenges. Many baby boomers appear to be indifferent towards the machinery space, thus it is logical to evaluate Caterpillar in light of current market trends. As we have previously suggested, Caterpillar is starting to experience a decline as private investors become more bearish due to increased sector volatility. The company's stock price movements, to a large extent, reflect the overall market conditions. However, the firm's stable fundamental indicators may suggest potential mid-term gains for Caterpillar's private investors. The end of the next fiscal quarter is anticipated to be on September 30, 2023.
Using predictive
technical analysis, we can analyze different prices and returns patterns and
diagnose historical swings to determine the real value of Caterpillar. In general, sophisticated investors focus on analyzing Caterpillar stock price patterns and their correlations with different microeconomic environment and drivers. They apply predictive analytics to build Caterpillar's daily price indicators and compare them against related drivers such as
momentum indicators and various other types of predictive indicators. Using this methodology combined with a more conventional
technical analysis and
fundamental analysis, we attempt to find the most accurate representation of
Caterpillar's intrinsic value. In addition to deriving basic predictive indicators for Caterpillar, many experienced traders also check how macroeconomic factors affect Caterpillar price patterns. Please read more on our
technical analysis page or use our predictive modules below to complement your research.
Please note, it is not enough to conduct a financial or market analysis of a single entity such as Caterpillar. Your research has to be compared to or analyzed against Caterpillar's peers to derive any actionable benefits. When done correctly, Caterpillar's competitive analysis will give you plenty of quantitative and qualitative data to validate your investment decisions or develop an entirely new strategy toward taking a position in Caterpillar.
How does Caterpillar Stands against Peers?
Analyzing Caterpillar competition or peers my help you to expand the diversification possibilities of your existing portfolios and to get a better perspective on locking in new positions. Try to analyze the advantages of investing in traded instruments related to Caterpillar across multiple sectors and
thematic ideas. A good competitive analysis can cover a lot of different areas. But what areas to choose depends on who you are. The more exhaustive you are in your analysis, the more effective your competitive analysis will be. Check out
Caterpillar Competition DetailsCaterpillar Gross Profit
Caterpillar Gross Profit growth is one of the most critical measures in evaluating the company. The Gross Profit growth rate is calculated simply by comparing Caterpillar previous period's values with its current period's values. Each time period you're measuring should be of equal lengths the increase or decrease, in a company's Gross Profit between two periods. Here we show Caterpillar Gross Profit growth over the last 10 years. Please check Caterpillar's
gross profit and other
fundamental indicators for more details.
Closer look at Caterpillar Downside Variance
Caterpillar has current Downside Variance of 1.55. Downside Variance (or DV) is measured by target semi-variance and is termed downside volatility. It is expressed in percentages and therefore allows for rankings in the same way as variance. One way to view downside volatility is the annualized variance of returns below the target.
Downside Variance is the probability-weighted squared below-target returns. The squaring of the below-target returns has the effect of penalizing failures at an exponential rate. This is consistent with observations made on the behavior of individual decision-making under.
Downside Variance | = | SUM(RET DEV)2 N(ER) |
| = | 1.55 |
| SUM | = | Summation notation |
| RET DEV | = | Actual returns deviation over selected period |
| N(ER) | = | Number of points with returns less than expected return for the period |
Let's now compare Caterpillar Downside Variance to its closest peers:
| CAT | 1.548668100903111 |
| LEV | 13.98 |
| OSK | 1.61 |
| TEX | 3.5 |
| TWI | 9.49 |
Caterpillar (NYSE: CAT) has seen its shares dip below their 50-day moving average of $266.05 recently, sparking interest among investors about a potential rebound. The company's net income stands at a robust $6.7B, showcasing its profitability. Despite a short ratio of 2.16X, the number of shares shorted has decreased from 7.4M in the prior month to 7.24M, indicating a decline in bearish sentiment.
The machinery giant has a strong market capitalization of
$145.42B and a current valuation of
$152.2B. Caterpillar's Price to Earnings ratio is 17.15X, which is relatively modest for a company of its size and profitability. The Wall Street target price for the stock is $281.95, suggesting a potential upside. Caterpillar's total assets are valued at $81.94B, against a total debt of $36.99B, showing a healthy balance sheet. The company also boasts a high institutional ownership of 71.92%, reflecting confidence from large-scale investors. The probability of bankruptcy stands at 13.82%, which is relatively low for a company in the industrials sector. Considering these factors, Caterpillar's stock appears poised for a rebound in October. However, investors should keep an eye on the market conditions and the company's upcoming financial reports. .
Caterpillar has 78 percent chance to finish below $276 next week
Caterpillar's recent information ratio, exceeding 0.19, highlights the company's capacity to generate superior returns relative to the risk undertaken. However, it's crucial to note that there's a 78 percent likelihood that the company's stock will close below $276 next week. This forecast is based on the stock's
current market conditions and volatility. Consequently, investors should proceed with caution and keep a close eye on the stock's performance. Now might be an ideal time to contemplate strategic portfolio adjustments or hedging options to minimize potential losses. Caterpillar exhibits relatively low volatility, with a skewness of 1.91 and a kurtosis of 8.49. Nevertheless, we recommend all investors to conduct independent research on Caterpillar to ensure all available information aligns with their expectations regarding its upside potential and future expected returns. Understanding various
market volatility trends often assists investors in timing the market. Correctly utilizing volatility indicators allows traders to gauge Caterpillar's stock risk against market volatility during both bullish and bearish trends.
The increased level of volatility that accompanies bear markets can directly affect
Caterpillar's stock price, adding stress to investors as they watch the value of their shares decrease. This typically compels investors to rebalance their portfolios by purchasing different stocks as prices drop. In conclusion, Caterpillar (CAT) presents a compelling investment opportunity with a strong upside potential. The analyst target price estimated value stands at a robust
$280.647, with the highest estimated target price reaching as high as
$350. Despite the overall consensus being a 'Hold' with 9 holds, 1 buy, 7 strong buys, and 2 strong sells among the 17 analyst estimates, the possible upside price is promising at $294.61. Moreover, the valuation real value surpasses the current market value at $300.37 versus $281.43, indicating a potential undervaluation. However, investors should also consider the possible downside price of $291.29. Caterpillar's fiscal year ends in December, offering a timely opportunity for investors to reassess their positions. .
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Raphi Shpitalnik is a Junior Member of Macroaxis Editorial Board. Raphael is a young entrepreneur who joined Macroaxis on a part-time basis at the beginning of the pandemic and eventually acquired a real taste for investing and fintech. He likes to analyze different equity instruments across a wide range of industries, focusing primarily on consumer products, sports, fintech, cannabis, and AI.
View Profile This story should be regarded as informational only and should not be considered a solicitation to sell or buy any financial products. Macroaxis does not express any opinion as to the present or future value of any investments referred to in this post. This post may not be reproduced without the consent of Macroaxis LLC. Macroaxis LLC and Raphi Shpitalnik do not own shares of Caterpillar. Please refer to our
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