Caterpillar ( NYSE: CAT ) is scheduled to announce Q2 earnings on Tuesday, Aug. 2, before market open.
Consensus EPS estimate is $3.02 (+16.2% Y/Y) and consensus revenue estimate is $14.39B (+11.6% Y/Y).
Over the last 2 years, CAT has beaten EPS estimates 100% of the time and revenue estimates 75% of the time.
Over the last 3 months, EPS estimates have seen 5 upward revisions and 6 downward. Revenue estimates have seen 1 upward revision and 2 downward.
UBS, in its list of top conviction picks by sector , said the narrative around CAT has been around disappointing margins during the post-COVID upcycle.
Morgan Stanley rated CAT Sell , saying it expects waning demand and more pressure on margins as the cycle turns.
But Bank of America said there are no signs of slowdown from CAT's customers and its tech investments were bearing fruit.
CAT slipped despite better-than-expected Q1 results , driven by higher end-user demand and impact from changes in dealer stocks. But higher freight and material costs weighed on profits.
The firm expects pricing will "more than offset" higher costs in FY22 and projected sequential growth in Q2 sales.
SA contributor Cory Cramer in a bearish analysis said CAT is a cyclical business and has further to fall before this down cycle is over. Recent sell-off was sparked by the Fed's increasingly hawkish stance, amplifying concerns of a recession .
Recent news:
- CAT is moving its headquarters to Dallas-Fort Worth area from Deerfield, Illinois.
- The construction equipment manufacturer raised its quarterly dividend by 8.1%.
- CAT announced a new $15B stock buyback program and projected higher long-term sales growth as energy transition expands its addressable market.
Shares of CAT, which fell 6.5% YTD, marginally outperformed the S&P 500 and S&P 500 Industrials indexes over the past 1 year .
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Will Caterpillar's Q2 results top estimates despite margin pressure, supply chain woes?