Caterpillar

Caterpillar is guiding to largely flat sales in 2024 on the expectation the company’s dealers won’t expand their equipment inventories much this year after increasing them by $700 million in 2023. Caterpillar says flat inventories at dealers will be a “headwind” for the company’s sales growth in 2024. Caterpillar’s 1Q sales slipped 1% from the same quarter a year earlier, driven by 5% drop in construction equipment sales and 7% decrease in mining equipment. The declines were partially offset by a 7% rise in sales of engines for energy and transportation. Shares sink 7% at $337.66.

Caterpillar (CAT) reported mixed first-quarter results versus a year ago impacted by lower sales volume, while the heavy equipment manufacturer expects revenue to be down on an annual basis in the current three-month period. The company reported adjusted earnings of $5.60 a share for the March quarter, up from $4.91 the year before, and ahead of the Capital IQ-polled consensus of $5.13. Revenue edged down to $15.8 billion from $15.86 billion, below the Street’s view for $15.99 billion. The stock declined 8.5% in Thursday trading. “Sales remained about flat compared to the prior year as lower volume was largely offset by favorable price realization,” Chief Financial Officer Andrew Bonfield said during an earnings call, according to a Capital IQ transcript. “The decline in volume was primarily due to lower sales to users,” led by weakness in Europe for construction industries. Machinery, energy and transportation revenue dipped 1% to $14.96 billion.

The following is a summary of the Caterpillar Inc. (CAT) Q1 2024 Earnings Call Transcript: Financial Performance: Caterpillar reported flat Q1 sales and revenues of $15.8 billion compared to last year. Adjusted operating profit increased by 5% to $3.5 billion. The company announced record adjusted profit per share at $5.60, an increase of 14%. Generated a free cash flow of $1.3 billion for the quarter. Notable increase in the backlog, with a value at $27.9 billion, up $400 million from the previous quarter. Performance was fueled by record deployment of $5.1 billion cash for share repurchases and dividends. Business Progress: Most end markets exhibited healthy demand for Caterpillar’s products and services. Anticipates a revenue increase in the Energy & Transportation business line, offset slightly by a softened European market in Construction Industries. The company forecasted the adjusted operating profit margin and ME&T free cash flow for 2024 to be in

CFRA, an independent research provider, has provided MT Newswires with the following research alert. Analysts at CFRA have summarized their opinion as follows: CAT shares have risen 65% from the end of October 2023 to a record of ~$375 per share. We now view CAT shares as fully valued following the recent run-up, and see there being less room to run given our outlook for low single-digit EPS expansion in 2024 and 2025. We believe the strong share performance can be tied to anticipated tailwinds in 2024, including government-led infrastructure investments, recovering residential construction activity, AI-driven data center buildout, and positive impacts from expected interest rate cuts. However, we view the near-term opportunity from these growth catalysts currently being baked into share price. China (typically 5%-10% of enterprise sales) poses a near-term headwind for CAT as economic conditions remain unfavorable, although a stronger-than-anticipated recovery would likely support stronger than forecasted

Truist Securities analyst Jamie Cook initiates coverage on Caterpillar with a Buy rating and announces Price Target of $390.

Citigroup analyst Timothy Thein maintains Caterpillar (NYSE:CAT) with a Neutral and raises the price target from $255 to $340.

Caterpillar (NYSE:CAT) Stock Analyst Ratings Date Upside/Downside Analyst Firm Price Target Change Rating Change Previous / Current Rating 02/12/2024 5.9% Citigroup $255 → $340 Maintains Neutral 02/06/2024 19.92% JP Morgan $345 → $385 Maintains Overweight 02/06/2024 -19.95% Baird $210 → $257 Maintains Underperform 02/06/2024 1.23% Wells Fargo $290 → $325 Maintains Equal-Weight 02/06/2024 11.2% Goldman Sachs $274 → $357 Maintains Buy 01/08/2024 -15.9% Morgan Stanley → $270 Initiates Coverage On → Equal-Weight 12/21/2023 -23.69% Bernstein $216 → $245 Maintains Market Perform 12/19/2023 -8.74% Stifel $285 → $293 Maintains Buy 11/20/2023 -22.13% HSBC → $250 Initiates Coverage On → Hold 11/08/2023 -8.12% Tigress Financial $282 → $295 Maintains Buy 11/01/2023 -14.66% Goldman Sachs $315 → $274 Maintains Buy 10/16/2023 -0.33% JP Morgan $315 → $320 Maintains Overweight 08/02/2023 -6.56% Stifel $275 → $300 Maintains Buy 08/02/2023 -1.89% JP Morgan $275 → $315 Maintains Overweight 08/02/2023 -0.33% TD Cowen $287 → $320

Goldman Sachs analyst Jerry Revich maintains Caterpillar (NYSE:CAT) with a Buy and raises the price target from $274 to $357.

Caterpillar (CAT) is likely to face pricing uncertainty in the second half and if markets remain slow competition increases, there’s a possibility of “downside to revenues and margins,” UBS said in a note emailed Tuesday. Following a strong performance in 2023, the company’s projected guidance suggests no growth in segment profit in 2024. “Between volumes and margins, we think the bigger risk is margins, where the main risk is pricing,” the note said. While volume decline is already expected by the company in 2024, significant downside is not expected unless substantial inventory reduction is necessary. Although the oil and gas business is strong, there could arguably be room for improvements in mining business  beyond 2024, UBS said. “We’re not convinced, and we see downside risk for [Caterpillar] after the run to start 2024,” UBS said. UBS raised its 2024 EPS estimate for the company to $20.40 from $20.15 and 2025

Caterpillar (NYSE:CAT) Stock Analyst Ratings Date Upside/Downside Analyst Firm Price Target Change Rating Change Previous / Current Rating 02/06/2024 11.21% Goldman Sachs $274 → $357 Maintains Buy 01/08/2024 -15.89% Morgan Stanley → $270 Initiates Coverage On → Equal-Weight 12/21/2023 -23.68% Bernstein $216 → $245 Maintains Market Perform 12/19/2023 -8.72% Stifel $285 → $293 Maintains Buy 11/20/2023 -22.12% HSBC → $250 Initiates Coverage On → Hold 11/08/2023 -8.1% Tigress Financial $282 → $295 Maintains Buy 11/01/2023 -14.64% Goldman Sachs $315 → $274 Maintains Buy 10/16/2023 -0.31% JP Morgan $315 → $320 Maintains Overweight 08/02/2023 -6.54% Stifel $275 → $300 Maintains Buy 08/02/2023 -1.87% JP Morgan $275 → $315 Maintains Overweight 08/02/2023 -0.31% TD Cowen $287 → $320 Maintains Outperform 08/02/2023 -11.21% Wells Fargo $240 → $285 Maintains Equal-Weight 08/02/2023 0.62% B of A Securities $283 → $323 Maintains Buy 08/02/2023 4.05% Credit Suisse $279 → $334 Maintains Outperform 08/02/2023 -1.87% Goldman

Goldman Sachs analyst Jerry Revich maintains Caterpillar (NYSE:CAT) with a Buy and raises the price target from $274 to $357.

The following is a summary of the Caterpillar Inc. (CAT) Q4 2023 Earnings Call Transcript: Financial Performance: Caterpillar reported a 13% increase in total sales and revenues reaching $67.1 billion in 2023, with Q4 accounting for $17.1 billion. Caterpillar posted an adjusted operating profit of $13.7 billion in 2023, a 51% surge over the previous year. Adjusted operating profit margin for 2023 was 20.5%, up 510 basis points compared to 2022. Caterpillar’s adjusted profit per share rose 53% to $21.21 in 2023, compared to 2022. The company generated $10 billion of ME&T free cash flow, surpassing its target range by over $2 billion. Caterpillar increased its ME&T free cash flow target range to $5 billion to $10 billion, from $4 billion to $8 billion. Business Progress: Caterpillar’s services revenue hit $23 billion in 2023, up 5% compared to 2022. Energy & Transportation and Construction Industries sales saw a significant increase