CAT - Caterpillar: Continued Upgrades Will Drive A Re-Rating; Buy

2024-06-12 13:23:12 ET

Summary

• Caterpillar has beat consensus EPS forecasts in 15 of the last 16 quarters.
• We detail the fundamental drivers for why we expect the pace of beats and analyst upgrades to continue.
• The current macro environment is bullish for Caterpillar as well.
• We conclude CAT stock has 30-50% upside from current levels.

Investment Thesis

Caterpillar Inc. ( CAT ) has beat consensus EPS forecasts in 15 of the last 16 quarters. We detail below the fundamental and macro drivers for why we expect that trend to continue, and why, we believe, it will drive a re-rating in the shares. We see a potential upside of as much as ~45%. We recommend a Buy on CAT stock.

What does Caterpillar do?

Founded in 1925, Caterpillar sells bulldozers, excavators, etc. to the construction and infrastructure markets, sells large trucks, hydraulic shovels, and drills to the mining industry and engines and turbines to the oil and gas, marine, rail, and power generation markets....

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