Caterpillar (CAT) Cut to “Sell” at Zacks Investment Research

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Caterpillar (NYSE:CAT) was downgraded by Zacks Investment Research from a “hold” rating to a “sell” rating in a report issued on Tuesday.

According to Zacks, “For 2019, Caterpillar anticipates EPS to be $11.75-$12.75, projecting year-over-year growth of 5-14%. Caterpillar cautioned that it expects modest sales growth in 2019 based on the current macroeconomic and geopolitical environment. In the Construction Industries segment, demand in Latin America will remain relatively low. Though demand remains steady in EMEA, political and economic uncertainties remain. The overall China market is expected to be roughly flat in 2019 following two years of significant growth. In the Energy and Transportation segment, the recent volatility in oil prices and takeaway constraints in the Permian will negatively impact demand for well servicing equipment in the first part of the year. Material cost inflation due to the impact of tariffs, increased transportation costs and supply chain challenges also remain concerns. The company has underperformed the S&P500 over the past year.”

Other equities research analysts also recently issued research reports about the stock. Robert W. Baird set a $161.00 target price on shares of Caterpillar and gave the company a “buy” rating in a research note on Tuesday, January 29th. BMO Capital Markets reduced their target price on shares of Caterpillar to $160.00 and set an “outperform” rating on the stock in a research note on Monday, February 4th. OTR Global downgraded shares of Caterpillar to a “positive” rating in a research note on Friday, February 15th. UBS Group set a $154.00 target price on shares of Caterpillar and gave the company a “buy” rating in a research note on Tuesday, January 29th. Finally, Royal Bank of Canada reduced their target price on shares of Caterpillar from $142.00 to $140.00 and set a “sector perform” rating on the stock in a research note on Tuesday, January 29th. They noted that the move was a valuation call. Three analysts have rated the stock with a sell rating, twelve have given a hold rating, fifteen have assigned a buy rating and one has issued a strong buy rating to the stock. The stock has an average rating of “Hold” and an average price target of $150.24.

Shares of CAT opened at $134.83 on Tuesday. Caterpillar has a twelve month low of $112.06 and a twelve month high of $161.60. The firm has a market capitalization of $79.63 billion, a PE ratio of 12.02, a PEG ratio of 0.62 and a beta of 1.46. The company has a current ratio of 1.37, a quick ratio of 0.96 and a debt-to-equity ratio of 1.78.

Caterpillar (NYSE:CAT) last announced its earnings results on Monday, January 28th. The industrial products company reported $2.55 earnings per share for the quarter, missing the Thomson Reuters’ consensus estimate of $2.98 by ($0.43). Caterpillar had a net margin of 11.23% and a return on equity of 45.31%. The firm had revenue of $14.34 billion during the quarter, compared to analysts’ expectations of $14.36 billion. During the same period in the prior year, the company posted $2.16 EPS. The company’s revenue was up 11.2% compared to the same quarter last year. On average, equities research analysts predict that Caterpillar will post 12.24 earnings per share for the current year.

A number of hedge funds and other institutional investors have recently bought and sold shares of the business. Sowell Financial Services LLC increased its position in Caterpillar by 5.5% during the 4th quarter. Sowell Financial Services LLC now owns 13,664 shares of the industrial products company’s stock valued at $1,736,000 after purchasing an additional 708 shares during the period. Norges Bank purchased a new position in Caterpillar during the 4th quarter valued at about $733,859,000. Actinver Wealth Management Inc. purchased a new position in Caterpillar during the 4th quarter valued at about $508,000. Financial Advocates Investment Management increased its position in Caterpillar by 12.6% during the 4th quarter. Financial Advocates Investment Management now owns 7,240 shares of the industrial products company’s stock valued at $895,000 after purchasing an additional 812 shares during the period. Finally, Coldstream Capital Management Inc. increased its position in Caterpillar by 5.3% during the 4th quarter. Coldstream Capital Management Inc. now owns 24,254 shares of the industrial products company’s stock valued at $3,082,000 after purchasing an additional 1,218 shares during the period. 66.58% of the stock is currently owned by institutional investors and hedge funds.

Caterpillar Company Profile

Caterpillar Inc manufactures and sells construction and mining equipment, diesel and natural gas engines, industrial gas turbines, and diesel-electric locomotives for construction, resource, and energy and transportation industries. Its Construction Industries segment offers asphalt pavers, backhoe loaders, compactors, cold planers, compact truck and multi-terrain loaders, forestry excavators, feller bunchers, harvesters, knuckleboom loaders, motorgraders, pipelayers, road reclaimers, site prep tractors, skidders, skid steer loaders, telehandlers, track-type loaders, wheel excavators, and track-type tractors.

See Also: Compound Annual Growth Rate (CAGR)

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