Caterpillar: Things Are Turning From Bad To Worse (Rating Downgrade)

Vladimir Dimitrov, CFA
6.49K Followers
(5min)

Summary

  • Caterpillar stock continues to underperform the market, even after the major rally in recent months.
  • The recent jump in CAT's share price, however, appears unsustainable once we consider current business fundamentals.
  • Looking ahead, the company's margins are expected to remain under pressure, which will weigh heavily on future returns.
Hydraulic Crawler Excavator Cat working at a ground. Russia. Saint-Petersburg. 16 January 2018.

aapsky

In recent months, Caterpillar Inc. (NYSE:CAT) stock seems to have begun a downward movement after the stock reached an all-time high in late 2024.

The peak coincided with my first warning on the stock that valuation appeared stretched and with

This article was written by

6.49K Followers
Vladimir Dimitrov, CFA is a former strategy consultant within the field of brand and intangible assets valuation. During his career in the City of London he has been working with some of the largest global brands within the technology, telecom and banking sectors. He graduated from the London School of Economics and is interested in finding reasonably priced businesses with sustainable long-term competitive advantages.

Analyst’s Disclosure:I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Please do your own due diligence and consult with your financial advisor, if you have one, before making any investment decisions. The author is not acting in an investment adviser capacity. The author's opinions expressed herein address only select aspects of potential investment in securities of the companies mentioned and cannot be a substitute for comprehensive investment analysis. The author recommends that potential and existing investors conduct thorough investment research of their own, including a detailed review of the companies' SEC filings. Any opinions or estimates constitute the author's best judgment as of the date of publication and are subject to change without notice.

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