CAT - 2 Wall Street Analysts Share Differing Views on Caterpillar Stock. Who Is Right?
2024-04-17 09:23:46 ET
Caterpillar (NYSE: CAT) is a cyclical stock, meaning its revenue, profit margin, profits, and cash flow tend to ebb and flow along with the economy. Its earnings can overshoot expectations when the economy is in growth mode and undershoot them when it is slowing.
Recently, two heavyweight analysts published opposing views regarding the stock. Morgan Stanley 's analyst set a new price target is $327 with an equal weight rating, while J.P. Morgan 's new price target is $435 with an overweight rating. The Morgan Stanley 12-month target suggests a 9% drop from the current price of around $360, while the J.P. Morgan target points to a 21% upside.
The case for buying Caterpillar relies on lower interest rates stimulating construction activity, ongoing benefits of infrastructure spending on its equipment, and higher commodity prices driving its mining machinery and energy equipment sales. If you are optimistic about these indicators, the stock is a buy.
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2 Wall Street Analysts Share Differing Views on Caterpillar Stock. Who Is Right?