Caterpillar (NYSE:CAT) Shares Down 3.6% Following Analyst Downgrade

Caterpillar Inc. (NYSE:CAT) shares fell 3.6% during trading on Tuesday after Erste Group Bank downgraded the stock from a buy rating to a hold rating. The stock traded as low as $824.00 and last traded at $841.67. 3,790,313 shares changed hands during mid-day trading, an increase of 31% from the average daily volume of 2,888,685 shares. The stock had previously closed at $873.28.

Several other equities research analysts have also issued reports on CAT. Truist Financial upped their price target on Caterpillar from $1,043.00 to $1,218.00 and gave the company a “buy” rating in a research report on Thursday, July 2nd. Rothschild & Co Redburn lifted their price objective on shares of Caterpillar from $700.00 to $950.00 and gave the stock a “neutral” rating in a report on Thursday, May 14th. Barclays increased their target price on shares of Caterpillar from $700.00 to $800.00 and gave the stock an “equal weight” rating in a report on Friday, May 1st. DA Davidson raised their price target on shares of Caterpillar from $650.00 to $845.00 and gave the stock a “neutral” rating in a research report on Monday, May 4th. Finally, Argus lifted their price target on shares of Caterpillar from $820.00 to $990.00 and gave the company a “buy” rating in a report on Tuesday, May 5th. Fourteen research analysts have rated the stock with a Buy rating and eleven have given a Hold rating to the stock. According to data from MarketBeat.com, the company presently has an average rating of “Moderate Buy” and a consensus price target of $980.57.

Insider Buying and Selling at Caterpillar

In related news, insider Jason Kaiser sold 5,642 shares of the company’s stock in a transaction on Monday, May 4th. The stock was sold at an average price of $883.03, for a total transaction of $4,982,055.26. Following the completion of the transaction, the insider directly owned 9,594 shares in the company, valued at $8,471,789.82. This represents a 37.03% decrease in their position. The sale was disclosed in a filing with the Securities & Exchange Commission, which is available through this hyperlink. Also, insider Lange Bob De sold 24,222 shares of the stock in a transaction on Wednesday, May 6th. The stock was sold at an average price of $922.92, for a total value of $22,354,968.24. Following the completion of the sale, the insider directly owned 86,029 shares in the company, valued at $79,397,884.68. This represents a 21.97% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. Over the last ninety days, insiders have sold 95,773 shares of company stock worth $87,642,635. 0.33% of the stock is owned by company insiders.

Key Stories Impacting Caterpillar

Here are the key news stories impacting Caterpillar this week:

• Positive Sentiment: Caterpillar received an upgrade to Zacks Rank #2 (Buy), reflecting greater optimism about its earnings outlook. Zacks also expects the company’s combination of an Earnings ESP and favorable estimates to support a potential quarterly earnings beat. What Makes Caterpillar (CAT) a New Buy Stock Caterpillar Earnings Expected to Grow
• Neutral Sentiment: The upcoming earnings release is the key near-term catalyst. Investors are looking for continued earnings growth and evidence that Caterpillar can exceed analyst expectations, following its latest report’s strong revenue and EPS performance. Caterpillar Earnings Expected to Grow: What to Know Ahead of Next Week’s Release
• Neutral Sentiment: After a substantial multiyear rally, valuation signals are mixed: earnings-based multiples appear reasonable, while discounted-cash-flow analysis suggests the stock is approximately fairly valued. This leaves investors demanding continued cash-flow and earnings growth to justify further gains. Caterpillar Stock Looks Slightly Above Fair Value Today
• Negative Sentiment: Erste Group Bank downgraded Caterpillar from Buy to Hold, adding to caution after the stock’s sharp advance.
• Negative Sentiment: China’s new export restrictions on rare-earth materials could raise costs or create delays for components used in Caterpillar’s motors, sensors and control systems. The longer-term development of domestic supply chains may reduce this risk, but near-term uncertainty is a headwind. Caterpillar Faces Rare Earth Squeeze

Institutional Inflows and Outflows

A number of hedge funds and other institutional investors have recently bought and sold shares of CAT. Decker Retirement Planning Inc. raised its holdings in shares of Caterpillar by 440.0% during the second quarter. Decker Retirement Planning Inc. now owns 27 shares of the industrial products company’s stock valued at $29,000 after buying an additional 22 shares during the last quarter. Matrix Trust Co boosted its position in shares of Caterpillar by 93.8% during the second quarter. Matrix Trust Co now owns 31 shares of the industrial products company’s stock worth $33,000 after buying an additional 15 shares during the period. Lam Group Inc. bought a new position in Caterpillar in the 1st quarter worth approximately $26,000. Ramsey Quantitative Systems acquired a new stake in Caterpillar in the 2nd quarter valued at approximately $48,000. Finally, Torren Management LLC acquired a new stake in Caterpillar in the 4th quarter valued at approximately $27,000. 70.98% of the stock is owned by institutional investors and hedge funds.

Caterpillar Stock Down 3.6%

The company has a debt-to-equity ratio of 1.64, a quick ratio of 0.81 and a current ratio of 1.35. The firm has a 50 day simple moving average of $929.10 and a two-hundred day simple moving average of $807.20. The stock has a market cap of $387.66 billion, a P/E ratio of 41.89, a P/E/G ratio of 1.74 and a beta of 1.57.

Caterpillar (NYSE:CAT) last released its quarterly earnings results on Thursday, April 30th. The industrial products company reported $5.54 earnings per share (EPS) for the quarter, topping the consensus estimate of $4.65 by $0.89. The company had revenue of $17.41 billion during the quarter, compared to analysts’ expectations of $16.53 billion. Caterpillar had a return on equity of 48.21% and a net margin of 13.33%.The company’s revenue for the quarter was up 22.2% compared to the same quarter last year. During the same quarter in the prior year, the business posted $4.25 earnings per share. Equities research analysts predict that Caterpillar Inc. will post 24.87 earnings per share for the current year.

Caterpillar Increases Dividend

The business also recently disclosed a quarterly dividend, which will be paid on Wednesday, August 19th. Investors of record on Monday, July 20th will be issued a $1.63 dividend. The ex-dividend date of this dividend is Monday, July 20th. This is an increase from Caterpillar’s previous quarterly dividend of $1.51. This represents a $6.52 annualized dividend and a yield of 0.8%. Caterpillar’s dividend payout ratio is currently 32.45%.

Caterpillar Company Profile

Caterpillar Inc is a global manufacturer of construction and mining equipment, diesel and natural gas engines, industrial gas turbines and locomotives. The company’s product portfolio includes earthmoving machines such as excavators, bulldozers, wheel loaders and off‑highway trucks, as well as a range of power generation products including generator sets and power systems for industrial and commercial use. Caterpillar serves customers across heavy construction, mining, energy, transportation and related industries with both equipment and integrated technology solutions.

In addition to manufacturing, Caterpillar provides a broad range of aftermarket parts and support services, including maintenance, repair, remanufacturing and fleet management tools.