7 Dow Jones Stocks That Are Still Laggards - 1 of 7

#1 - Caterpillar, Inc. (NYSE:CAT)

Caterpillar, Inc. (NYSE: CAT) Many analysts seem to be viewing Caterpillar as a stock that represents a great buying opportunity. Recently 27 analysts gave guidance that suggested that Caterpillar’s stock could rise up to 30% above its October low. The stock was battered in October reporting a -20.4% return in that period, bringing its return for the year down to a -14.3%. Like 3M, Caterpillar is facing some challenges in near-term earnings periods as a stronger dollar, increased freight costs, and potential tariff issues will continue to weigh on the sector. However, the larger issue for Caterpillar seems like a case of managing expectations – or trying to determine what reasonable expectations should be. Their latest earnings report showed strong gains in both revenue and earnings per share, but the results weren’t as strong as expected. This reflected softening demand in Asia, and in particular China. Those fears were not unfounded as China’s economy reported its weakest third quarter since the Great Recession. However, the question has to be asked if Caterpillar is an example of a good stock that was the victim of an overreaction. The company is forecasting positive earnings guidance for the fourth quarter, including accelerated growth from China. Like many companies, there would be a lot more clarity about Caterpillar were the noise about trade and tariffs to subside.

About Caterpillar

Current Price

$366.04

Consensus Rating

Hold

Ratings Breakdown

7 Buy Ratings, 6 Hold Ratings, 4 Sell Ratings.

Consensus Price Target

$384.33 (5.0% Upside)