Caterpillar (NYSE:CAT) Stock Falls 5.2% – Here’s Why

Caterpillar Inc. (NYSE:CAT)’s stock price dropped 5.2% on Wednesday. The company traded as low as $582.51 and last traded at $591.3350. Approximately 5,747,261 shares changed hands during mid-day trading, an increase of 99% from the average session volume of 2,883,586 shares. The stock had previously closed at $623.94.

Key Stories Impacting Caterpillar

Here are the key news stories impacting Caterpillar this week:

• Positive Sentiment: Director James Fish Jr. bought 1,000 shares for about $620,000, increasing his personal stake by nearly 27%—a potential signal of confidence in Caterpillar. Article: Caterpillar director purchases shares
• Positive Sentiment: Caterpillar reported a record $78 billion backlog and is expanding engine and turbine capacity to serve rising data-center power demand. These trends could support future sales, although the company flagged pressure on margins. Article: Caterpillar expands production for data-center demand
• Neutral Sentiment: The company completed its acquisition of the Fabick Cat dealership, adding operations in Missouri, Illinois, Wisconsin and Michigan’s Upper Peninsula to its dealer network. The move may improve regional customer support, but its near-term financial effect is unclear. Article: Caterpillar completes Fabick Cat acquisition
• Negative Sentiment: Margin concerns remain: tariffs, manufacturing costs and production constraints could limit the benefit of strong demand and the large backlog. Article: Q3 earnings call highlights
• Negative Sentiment: Analyst caution is adding pressure. DA Davidson cut its price target to $685 from $882 and maintained a Neutral rating, while Freedom Capital Markets lowered its target to $800 from $980, though it retained a Buy rating. The cuts underscore concerns about valuation and the durability of margins. Article: Caterpillar target cut and margin concerns

Wall Street Analyst Weigh In

A number of research firms recently issued reports on CAT. Sanford C. Bernstein restated a “market perform” rating and set a $749.00 price objective on shares of Caterpillar in a report on Wednesday, October 14th. Morgan Stanley reduced their target price on shares of Caterpillar from $915.00 to $675.00 and set an “equal weight” rating for the company in a research report on Friday, October 30th. Erste Group Bank lowered shares of Caterpillar from a “buy” rating to a “hold” rating in a research note on Monday, July 27th. DA Davidson lowered their price target on shares of Caterpillar from $882.00 to $685.00 and set a “neutral” rating on the stock in a report on Monday. Finally, JPMorgan Chase & Co. dropped their price objective on Caterpillar from $1,100.00 to $1,000.00 and set an “overweight” rating on the stock in a research note on Friday, October 30th. Fifteen analysts have rated the stock with a Buy rating and twelve have given a Hold rating to the company’s stock. According to MarketBeat.com, the stock has an average rating of “Moderate Buy” and an average target price of $898.25.

Caterpillar Trading Down 5.2%

The firm has a 50-day simple moving average of $775.16 and a 200-day simple moving average of $807.33. The company has a quick ratio of 0.88, a current ratio of 1.42 and a debt-to-equity ratio of 1.50. The stock has a market cap of $271.82 billion, a PE ratio of 23.20, a P/E/G ratio of 1.05 and a beta of 1.65.

Caterpillar (NYSE:CAT) last announced its quarterly earnings results on Thursday, October 29th. The industrial products company reported $7.20 earnings per share for the quarter, beating the consensus estimate of $7.06 by $0.14. Caterpillar had a return on equity of 59.87% and a net margin of 15.21%. The company had revenue of $20.68 billion during the quarter, compared to analysts’ expectations of $20.76 billion. During the same period in the previous year, the business earned $4.95 earnings per share. The firm’s quarterly revenue was up 17.3% compared to the same quarter last year. Equities analysts forecast that Caterpillar Inc. will post 27.62 earnings per share for the current year.

Caterpillar Dividend Announcement

The firm also recently disclosed a quarterly dividend, which will be paid on Thursday, November 19th. Stockholders of record on Monday, October 26th will be issued a dividend of $1.63 per share. The ex-dividend date of this dividend is Monday, October 26th. This represents a $6.52 annualized dividend and a dividend yield of 1.1%. Caterpillar’s payout ratio is presently 25.58%.

Insiders Place Their Bets

In related news, CEO Joseph Creed sold 32,401 shares of the stock in a transaction on Friday, August 28th. The shares were sold at an average price of $808.98, for a total transaction of $26,211,760.98. Following the transaction, the chief executive officer owned 34,555 shares of the company’s stock, valued at approximately $27,954,303.90. This trade represents a 48.39% decrease in their position. The transaction was disclosed in a document filed with the Securities & Exchange Commission, which is accessible through this link. Also, Director James C. Fish, Jr. bought 1,000 shares of the firm’s stock in a transaction that occurred on Monday, November 2nd. The stock was acquired at an average price of $620.39 per share, for a total transaction of $620,390.00. Following the transaction, the director owned 4,714 shares in the company, valued at $2,924,518.46. This trade represents a 26.93% increase in their ownership of the stock. Additional details regarding this purchase are available in the official SEC disclosure. 0.33% of the stock is owned by corporate insiders.

Institutional Trading of Caterpillar

Several large investors have recently modified their holdings of the business. Texas Bank & Trust Co grew its holdings in shares of Caterpillar by 2.8% during the third quarter. Texas Bank & Trust Co now owns 1,017 shares of the industrial products company’s stock valued at $825,000 after buying an additional 28 shares during the last quarter. M&G PLC grew its holdings in Caterpillar by 377.1% during the third quarter. M&G PLC now owns 20,151 shares of the industrial products company’s stock worth $16,342,000 after acquiring an additional 15,927 shares during the period. Kestra Investment Management LLC increased its holdings in shares of Caterpillar by 49.6% during the 3rd quarter. Kestra Investment Management LLC now owns 2,792 shares of the industrial products company’s stock valued at $2,264,000 after purchasing an additional 926 shares in the last quarter. AlphaCore Capital LLC raised its position in shares of Caterpillar by 18.8% in the third quarter. AlphaCore Capital LLC now owns 5,144 shares of the industrial products company’s stock worth $4,171,000 after acquiring an additional 813 shares during the period. Finally, Clear Wave Wealth Management LLC boosted its position in Caterpillar by 26.2% during the third quarter. Clear Wave Wealth Management LLC now owns 487 shares of the industrial products company’s stock worth $395,000 after purchasing an additional 101 shares in the last quarter. 70.98% of the stock is owned by institutional investors.

Caterpillar Company Profile

Caterpillar Inc is a manufacturer of construction, mining, and industrial equipment. Its product portfolio includes excavators, bulldozers, wheel loaders, motor graders, articulated trucks, and other machinery used in construction, infrastructure development, mining, quarrying, forestry, and related industries. The company also produces diesel and natural gas engines, industrial gas turbines, generator sets, and other power-generation and transportation equipment.

Caterpillar operates through businesses focused on construction industries, resource industries, and energy and transportation.