CAT - Caterpillar's Earnings: Can The Stock Keep Outperforming?
2024-04-18 08:00:00 ET
Summary
- Caterpillar's shares have continued to soar and appreciate, thanks to resilient and consistent results.
- Favorable macro-trends, such as increased construction equipment use, reshoring efforts, and the transition towards renewables, are benefiting the company.
- Caterpillar's FY2023 results were record-breaking, but it is time to understand whether this trend is sustainable of if we should moderate our expectations.
Introduction
Caterpillar ( CAT ) is the world's leading construction, mining, and energy machinery and equipment manufacturer. Unlike many similar industrial companies, its shares continue to soar and appreciate, thanks to extremely resilient and consistent results. Therefore, the stock trades at a compelling valuation, higher even than that of industry leaders such as Paccar ( PCAR ) and Deere ( DE ).
Just two years ago, when I first covered it, the stock was trading at $218. In hindsight, many would pay to have that average price on their shares because right now the same shares need to be paid $363 each. Why has Caterpillar been such a rewarding investment? What is driving up the stock while other machinery manufacturers, such as Deere, have returned much less?...
Caterpillar's Earnings: Can The Stock Keep Outperforming?