CAT - Caterpillar: Why The Stock Has Upside Potential From Current Levels

2024-02-11 02:42:53 ET

Summary

• Caterpillar is the world's largest manufacturer of heavy equipment, holding 16.3% of the global market share.
• The company is poised to benefit from the US government's infrastructure investments and a potential capex cycle.
• Caterpillar's profitability metrics are strong, with resilient numbers and a track record of beating EPS.
• My DCF Shows Caterpillar is 37% undervalued, therefore I assign a "Strong Buy" to the stock at current levels.

Business Overview/Investment Thesis

Caterpillar is a leading company within the industrial equipment/manufacturing space. Caterpillar is the world's largest manufacturer of heavy equipment and holds 16.3% of total global market share.

Total Global Market Share (Per Statista )

The investment thesis around Caterpillar has three components:

1/ Caterpillar should benefit as the United States continues to invest in revitalizing its infrastructure around the country. As the company is the leading provider of heavy machinery, it is poised to continue capturing market share and driving revenue growth....

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