CAT - Caterpillar Q2 earnings on deck what to expect

2023-07-31 14:01:37 ET

• Heavy machinery maker Caterpillar ( NYSE: CAT ) is scheduled to announce Q2 earnings results on Tuesday, August 1st, before market open.
• The consensus EPS estimate is $4.58 and the consensus revenue estimate is $16.53 billion.
• Over the last 2 years, CAT has beaten EPS estimates 88% of the time and has beaten revenue estimates 75% of the time.
• Over the last 3 months, EPS estimates have seen 8 upward revisions and 1 downward. Revenue estimates have seen 2 upward revisions and 1 downward.
• The company on April 27 reported Q1 non-GAAP EPS of $4.91, comfortably beating estimates by $1.12. Revenue of $15.9 billion was up 16.9% from last year and ahead of expectations by $630 million.
• CAT has a Quant rating of " STRONG BUY ", with a 4.55 rating score.
• CAT has an industry ranking of 15 out of 41 among construction machinery and heavy transportation equipment stocks, as per SA's Quant ranking.
• Wall Street rates the CAT stock " HOLD " and Seeking Alpha authors rate it " BUY ".
• CAT stock rose 18.5% in 2022, while the benchmark S&P 500 Index slipped nearly 20% for the year.
• Stock is up 10.7% so far this year as of Friday's close. The S&P 500 Industrials Sector Index is up 12.1% YTD.

Recent analyses on CAT:

" There are plenty of reasons to be bullish on Caterpillar, from the infrastructure push in the US to global energy and resources demand. Heavy-duty machines are not a high-margin business, but CAT made great profits along with stable revenue and renewed growth momentum from its existing applications. Twenty years ago, we had the chance to visit the company's factory floor. The impression was neat and efficient. It is well-managed and well-respected. We believe if the macro environment can avoid recession, it will have more upside. But with uncertainty still on the horizon and the inflation fight not yet over, investors are right to stay neutral at the moment. We recommend a hold currently ," writes SA contributor Waterside Insight in a July 31 analysis .

" The near-term outlook of Caterpillar looks highly favorable. The ongoing increase in construction spending and the rising demand for commodities and minerals should continue to be significant tailwinds that drive growth. Recession is a notable risk that will impact demand and push back investments and spending, but I am not too concerned right now as the economy remains resilient. For instance, the Federal Reserve recently raised its median GDP projection for the year from 0.4% to 1%. The current valuation is also discounted on a historical basis, which should present ample upside if growth can hold up. Therefore, I rate the company as a buy ," writes SA contributor Felix Fung in a July 27 report .

" As far as Caterpillar's valuation is concerned, I stick to my recent rating and the explanation I gave in my past review . As far as Caterpillar is in the $220-$240 range, it's trading around what I think is its fair value. Therefore, I see the company trading at a little premium... With the stock trading at all-time highs near $260, I would rather wait for another pullback before buying. In fact, this stock usually goes through some downturns which offer more compelling entry points. Overall, Caterpillar keeps on being on my watchlist, waiting to become part of my dividend growth portfolio ," writes SA contributor Luca Socci in a July 28 report .

More on CAT:

• Buy Caterpillar's Recent Breakout .
• Caterpillar: A Good Value Opportunity .
• Caterpillar: Highly Cyclical Business But Can Likely Keep Hiking Dividends For Years To Come .

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