#1 - Caterpillar Inc. (NYSE:CAT)
Caterpillar Inc. (NYSE: CAT) - Caterpillar faces the vexing problem of being an overvalued stock in an industry that’s typically negatively affected by higher interest rates. The intrinsic value of the stock based on projected cash flow appears to be overvalued. Other fundamental metrics working against the stock are overvalued assets and earnings compared to the U.S. Machinery industry average. The company’s stock is also considered to be a poor value based on next year’s anticipated growth. However, their projected future earnings and revenues are supposed to grow, albeit at a rate that doesn’t indicate high growth. Caterpillar reported exceptionally strong first quarter results that the company itself acknowledged may be the high water mark for the industry. The company was also seeing a lot of its growth coming from sales to China which are currently being affected by the ongoing trade war between China and the Trump administration. Rising interest rates at home and the potential for declining sales abroad along with some unfavorable metrics should give investors caution going forward.
About Caterpillar
Caterpillar Inc manufactures and sells construction and mining equipment, off-highway diesel and natural gas engines, industrial gas turbines, and diesel-electric locomotives in worldwide. Its Construction Industries segment offers asphalt pavers, compactors, road reclaimers, forestry machines, cold planers, material handlers, track-type tractors, excavators, telehandlers, motor graders, and pipelayers; compact track, wheel, track-type, backhoe, and skid steer loaders; and related parts and tools.
Read More - Current Price
- $388.25
- Consensus Rating
- Hold
- Ratings Breakdown
- 6 Buy Ratings, 7 Hold Ratings, 4 Sell Ratings.
- Consensus Price Target
- $365.33 (5.9% Downside)
