Cat-astrophe? No, But There Is A Good Case Against Caterpillar Shares
DoctoRx • 48 Comments
DoctoRx • 48 Comments
Thu, Jan. 28, 7:33 AM
- Caterpillar (NYSE:CAT): Q4 EPS of $0.74 beats by $0.04.
- Revenue of $11.03B (-22.5% Y/Y) misses by $420M.
- Shares +1.9% PM.
Wed, Jan. 27, 5:30 PM
- ABT, ACAT, ADS, AEP, AIT, AN, ARG, AUO, AVT, BABA, BANC, BC, BHI, BLL, BMS, BMY, BOFI, BX, CAT, CELG, CHKP, CLFD, CRR, CSH, CY, DGX, DLX, DST, EPD, EXTR, F, FCFS, FCS, FLWS, GLOP, GNTX, HAR, HCA, HGG, HOG, HP, HSY, HUBB, INGR, IVZ, JBLU, JCI, KEM, LEA, LLL, LLY, LRN, MITK, MJN, MKC, MMYT, MO, MTH, NDAQ, NEE, NOC, NTCT, NUE, ORI, OSK, PHM, POT, RDN, RGS, RTN, SHW, SWK, SXC, TCB, TGI, TMO, TROW, TWC, UA, UBSI, VLO, WCC, WRLD, XEL, ZBH
Wed, Jan. 27, 10:09 AM
- Caterpillar (CAT -2.3%) sinks in early trading after disclosing a 16% drop in worldwide retail sales of its machinery for the rolling three-month period ending in December, following an 11% decline for the three months ending in November.
- CAT says retail sales to resource industries worldwide fell 38% during the three-month period, while retail sales to construction industries slipped 8%.
- Within the energy and transportation segment, total sales fell 32%, led by a 58% plunge in transportation products and a 29% slide in oil and gas products.
- CAT is scheduled to report earnings tomorrow.
Mon, Jan. 25, 8:39 AM
- Caterpillar (NYSE:CAT) -3.7% premarket after Goldman Sachs lowered the heavy equipment maker's stock to Sell from Neutral, and axed its price target to $51 from $67.
- The brokerage foresees lower returns on capital for a sustained period amid restrained global infrastructure spending.
- Analyst Jerry Revich also lowered his estimate on Caterpillar's 2017 earnings per share, to $3.20 from $3.41 (roughly 15% below the consensus), citing excess capacity and lower demand from commodity export countries.
Tue, Jan. 19, 10:32 AM
- Barclays has lowered its price target on Caterpillar (CAT +0.1%) to $63 from $75, while maintaining its "equal weight" rating on the stock.
- The company is part of a machinery industry that is underperforming and has poor sentiment, Barclays said.
- "High channel inventories, earnings management, stock buybacks, pension changes, leasing, currency, steeper end market falls, and other unseen factors make it likely the trough will be worse than most expect."
Wed, Jan. 6, 12:27 PM
- Caterpillar (CAT -1.6%) gets an Underperform rating and a $67.96 price target from Macquarie after the firm analyzed ~$1.7B of U.S. equipment listed on CAT's website on January 1 and compared it to prices found a month earlier.
- CAT's inventory diminished to $2.39B from $2.47B, which Macquarie attributes to softening end-market demand, excess inventory and increased competition, and the firm thinks pricing will be weaker in 2016 than 2015.
- Macquarie suggests investors sell CAT on any strength in the stock and sees 2016 as a challenging year with the worst of the oil and gas decline still ahead.
Mon, Jan. 4, 12:48 PM
- Caterpillar (CAT -1.8%) lifts off sharp early losses even as Citi analysts "struggle to identify positive catalysts" amid slowing global growth and the firm's bearish commodity price outlook, as they lower they see CAT revenues declining by ~10% in 2016 and continue to rate shares at Neutral.
- Nevertheless, Citi notes that CAT sentiment is low, and investors are already positioned for continued dollar strength, which it says makes either susceptible to reversing, and adds that CAT's valuation is near historical average lows.
Fri, Jan. 1, 4:53 AM
- Dow: NKE +29%; HD +27%; MCD +25%; GE +21%; V +16%.
- S&P 500: NFLX +135%; AMZN +119%; ATVI +90%; NVDA +61%; CVC +54%.
- Nasdaq: NFLX +135%; AMZN +119%; CTRP +104%; ATVI +90%; NVDA +61%.
- Dow: WMT -29%; CAT -28%; AXP -26%; CVX -21%; UTX -18%.
- S&P 500: CHK -77%; CNX -77%; SWN -75%; FCX -71%; FOSL -67%.
- Nasdaq: MU -59%; WDC -47%; STX -47%; VIAB -46%; BBBY -37%.
Dec. 21, 2015, 10:53 AM
- A U.S. federal court jury has found Caterpillar (CAT +0.8%) guilty of stealing trade secrets from one of its suppliers after an eight-week trial in Chicago.
- "We are disappointed by the jury's verdict," said a Caterpillar spokeswoman. "At this point, we are considering our next steps in this litigation."
- The jury awarded the supplier, Miller U.K., about $74M of damages.
Dec. 18, 2015, 2:58 PM
- Caterpillar (CAT +0.3%) is little changed despite reporting its 36th consecutive month of declining annual retail sales, nearly doubling the 19 months of declines tallied during the financial crisis.
- Total world machine sales for the three-month rolling period ending in November fell 11% Y/Y, including a 28% plunge in resource industries sales and a 6% drop in construction sales; total sales for the rolling period ending in October fell 16%.
- Energy and transportation retail sales for the November rolling period tumbled 29% Y/Y after sliding 27% in the three months ending in October.
Dec. 16, 2015, 8:59 AM
- Deutsche Bank lowers Caterpillar (NYSE:CAT) to Hold from Buy, stating 2016 consensus estimates are too high with the company losing share in mining equipment/aftermarket.
- The firm cuts its price target on the stock to $60 from $80.
- CAT -1.5% premarket
Dec. 11, 2015, 9:22 AM
- A 36-year veteran of CAT, Ed Rapp has been recently diagnosed with ALS, and will focus his energies on fighting the disease, and helping the search for a cure.
- To assure a smooth transition, Rapp will stay on board with CAT and continue leading the Resource Industries group through early next year. The company will name a replacement early next year as well.
Dec. 9, 2015, 12:52 PM
- Caterpillar (CAT -1.7%) extends its losses after saying it would maintain its quarterly dividend of $0.77/share; shares were bouncing slightly above and below the flatline before the announcement.
- "Paying a dividend in times of business and economic uncertainty and throughout business cycles is a priority for use of our cash," CEO Doug Oberhelman said about an hour ago.
- There has been some speculation that CAT might cut its dividend to help free cash flow and liquidity amid falling commodities prices and an uncertain global economy.
Dec. 8, 2015, 6:20 PM
- Joy Global (NYSE:JOY) is maintained with a Sell rating with a reduced $8 stock price target, cut from $14, at Goldman Sachs, which explains that even though Joy shares have been weak for two years, it is important to keep in mind that the base metals deflation cycle remains in the early stages, coal is "structurally" losing share to natural gas and alternative energy sources, and Joy's tangible book value of $900M is higher than the stock's $1.4B market cap.
- Goldman maintains a Neutral rating on Caterpillar (NYSE:CAT) with a price target lowered to $67 from a previous $72, given the company's competitive position within the challenging end market; however, CAT could benefit in 2017 as U.S. shale capex profiles begin recovering.
Dec. 8, 2015, 3:18 PM
- It's been a rough run for value stocks over the past few years, but the metric used to determine value - price/book - may not be the right one, says Citi's Robert Buckland. Free-cash-flow yield is better, he argues. noting this metric tracked traditional value in the 1990s and 2000s, but has easily outperformed over the past decade.
- It's a sign of the times, he says, as FCF is a "capex-suspicious metric," and investors are concerned about the economic outlook, and cynical about capital allocation decisions of managements.
- The list of 28 U.S. value (as defined by FCF yield) plays: BHI, VIAB, WFM, ANTM, HPQ, ABC, LBTYA, M, AAPL, CTL, XRX, LYB, CMI, ETN, MRK, VLO, CSCO, WRK, IBM, LVS, ESRX, IP, CAH, ADM, INTC, CAT, ABBV, EMN
Nov. 19, 2015, 12:24 PM
- Caterpillar (CAT -1.2%) is lower after disclosing a 16% decline in its monthly worldwide machine retail sales for October vs. an 11% drop in September.
- CAT's sales have now fallen for 35 consecutive months, with October's 16% drop ranking as the largest drop during the streak and the biggest monthly decline since February 2010.
- Sales fell vs. the prior-year period in each of CAT's four global regions and three main industries, with the worst slowdowns in construction sales in Latin America (-41% in October) and in resources industry sales in Asia (-37%).
- "The global mining and construction business has been in a funk due to the crash in commodity prices, the slowdown in China, and the strong dollar, and the monthly machinery sales totals from Caterpillar really put these declines into perspective," Bespoke writes.
- Axiom Capital reiterates its Sell rating and $28 year-end 2016 price target on the shares.
Caterpillar, Inc. is engaged in the manufacturing of construction & mining equipment, diesel & natural gas engines, industrial gas turbines and diesel-electric locomotives. It provides technology for construction, transportation, mining, forestry, energy, logistics, electronics, financing and... More
Sector: Industrial Goods
Industry: Farm & Construction Machinery
Country: United States