134.54 0.00 (0.00%)
After hours: 4:01PM EST
|Bid||134.06 x 900|
|Ask||134.14 x 1100|
|Day's Range||129.16 - 135.90|
|52 Week Range||112.06 - 173.10|
|Beta (3Y Monthly)||1.55|
|PE Ratio (TTM)||21.38|
|Forward Dividend & Yield||3.44 (2.61%)|
|1y Target Est||N/A|
Caterpillar (CAT) has an impressive earnings surprise history and currently possesses the right combination of the two key ingredients for a likely beat in its next quarterly report.
Stocks are continuing to struggle with the 24,000 level on the Dow Jones Industrial Average as investors deal with various crosscurrents. Parts of the Federal government remain shuttered. U.S.-China trade talks continue to grind on as the Chinese economy shows signs of slowing. The fate of Brexit remains unknown. And the Federal Reserve seems scatterbrained, unable to decide if it's dovish or hawkish after the harrowing market environment in December. In keeping with the directionless feel, stocks opened strong on a Netflix (NASDAQ:NFLX) price hike, but it is now cutting gains as trade talks seem to have hit another impasse. Bank earnings have also been disappointing with Wells Fargo (NYSE:WFC) reporting the worst mortgage loan numbers since the financial crisis as the housing market slams into a wall. InvestorPlace - Stock Market News, Stock Advice & Trading Tips * 10 Companies That Could Post Decelerating Profits As a result, a number of iconic Dow Jones stocks look vulnerable to renewed downside pressure. Here are five such stocks to sell now: ### Caterpillar (CAT) Caterpillar (NYSE:CAT) shares look vulnerable to a reversal as CAT contends with resistance from four-months of overhead resistance. As such, CAT stock has set up a test of the recent lows near $117, which would be worth a decline of 10% from here as the U.S.-China trade talks go nowhere fast. This is poor timing for Bank of America Merrill Lynch analysts, who recently upgraded the stock to Buy. The company will next report results on Jan. 28 before the bell. Analysts are looking for earnings of $2.98 per share on revenues of $14.3 billion. When the company last reported on Oct. 23 earnings of $2.86 beat estimates by a penny on an 18.4% rise in revenues. ### Disney (DIS) Disney (NYSE:DIS) shares are suffering a sharp reversal lower, falling back below its 50-day moving average to form a "bearish engulfing" candlestick that presages more weakness ahead. Not exactly the behavior investors were looking for ahead of the opening of the eagerly awaited Star Wars theme park areas in Disneyland and Disney World. * 10 A-Rated Stocks the Smart Money Is Piling Into DIS will next report results on Feb. 5 after the close. Analysts are looking for earnings of $1.6 per share on revenues of $15.4 billion. When the company last reported on Nov. 8, earnings of $1.48 per shear beat estimates by 13 cents on an 11.9% rise in revenues. ### Goldman Sachs (GS) Shares of Goldman Sachs (NYSE:GS) have stalled out near resistance at the $180-a-share level, setting up a likely reversal that tests the lows set in late December. Financial stocks overall are showing weakness this morning after earnings results from WFC and JPM revealed problems in mortgage loan activity and fixed income trading. The company will next report results on Jan. 16 before the bell. Analysts are looking for earnings of $5.4 per share on revenues of $7.9 billion. When the company last reported on Oct. 16, earnings of $6.28 per share beat estimates by 94 cents on a 3.8% rise in revenues. ### Home Depot (HD) Shares of Home Depot (NYSE:HD) are rolling lower after testing highs previously set in November and December. HD stock is remaining below its 200-day moving average as the one-time momentum favorite succumbs to the realization that the U.S. housing market is in trouble -- plagued by a combination of higher mortgage rates, absurd pricing and impacted affordability. * 7 Video Game Stocks on Steep Discount The company will next report results on Feb. 12 before the open. Analysts are looking for earnings of $2.2 per share on revenues of $26.6 billion. When the company last reported on Nov. 13, earnings of $2.51 per share beat estimates by 24 cents on a 5.1% rise in revenues. ### JPMorgan (JPM) Shares of JPMorgan (NYSE:JPM) are struggling to stay above the $100-a-share level and remain well below their 50-day and 200-day moving averages. The company reported results before the bell. Earnings of $1.98 per share missed estimates by 21 cents on an 8.1% rise in revenues. Management cited a decline in fixed income trading revenue, which dropped 16% from last year. When the company last reported on Oct. 12, earnings of $2.34 per share beat estimates by 8 cents on a 7.8% rise in revenues. Watch for a test of the late December low as shareholders realize that loan growth and credit quality is vulnerable, setting up a 10% drop from here. As of this writing, William Roth did not hold a position in any of the aforementioned securities. ### More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Companies That Could Post Decelerating Profits * 10 A-Rated Stocks the Smart Money Is Piling Into * Mizuho: 7 Long-Term Value Stocks to Buy Now Compare Brokers The post 5 Dow Jones Stocks to Sell Before Things Get Uglier appeared first on InvestorPlace.
# Caterpillar Inc ### NYSE:CAT View full report here! ## Summary * Perception of the company's creditworthiness is negative * Bearish sentiment is low * Economic output for the sector is expanding but at a slower rate ## Bearish sentiment Short interest | Positive Short interest is extremely low for CAT with fewer than 1% of shares on loan. This could indicate that investors who seek to profit from falling equity prices are not currently targeting CAT. ## Money flow ETF/Index ownership | Neutral ETF activity is neutral. The net inflows of $13.26 billion over the last one-month into ETFs that hold CAT are not among the highest of the last year and have been slowing. ## Economic sentiment PMI by IHS Markit | Negative According to the latest IHS Markit Purchasing Managers' Index (PMI) data, output in the Industrials sector is rising. The rate of growth is weak relative to the trend shown over the past year, however, and is easing. ## Credit worthiness Credit default swap | Negative The current level displays a negative indicator. CAT credit default swap spreads are near their highest levels for the past 1 year, which indicates the market's more negative perception of the company's credit worthiness. Please send all inquiries related to the report to firstname.lastname@example.org. Charts and report PDFs will only be available for 30 days after publishing. This document has been produced for information purposes only and is not to be relied upon or as construed as investment advice. To the fullest extent permitted by law, IHS Markit disclaims any responsibility or liability, whether in contract, tort (including, without limitation, negligence), equity or otherwise, for any loss or damage arising from any reliance on or the use of this material in any way. Please view the full legal disclaimer and methodology information on pages 2-3 of the full report.
Technology shares pulled Wall Street lower on Monday, after an unexpected drop in China's exports in December reignited worries of a slowdown in global economic growth. The China trade data reinforced concerns that U.S. tariffs on Chinese goods were taking a toll on the world's second-largest economy, prompting companies such as Apple Inc to issue profit warning. Chipmakers, which get a sizable portion of their revenue from China, took a hit, with the Philadelphia SE semiconductor index down 1.01 percent.
Technology shares pulled Wall Street lower on Monday, after an unexpected drop in China's exports in December reignited worries of a slowdown in global economic growth. The China trade data reinforced concerns that U.S. tariffs on Chinese goods were taking a toll on the world's second-largest economy, prompting companies such as Apple Inc to issue profit warning. Chipmakers, which get a sizable portion of their revenue from China, took a hit, with the Philadelphia SE semiconductor index slipping 1.60 percent.
Key Updates from the Industrial Sector Last Week (Continued from Prior Part) ## Cummins appoints new CFO On January 10, 2019, Cummins (CMI) announced that Pat Ward, its current CFO, will retire from his position. Cummins also announced that Mark Smith would be replacing Ward as CFO, effective on March 31, 2019. Ward has worked with Cummins for more than 30 years. Tom Linebarger, Cummins’ chair and CEO, said, “Pat has had an extraordinary career at Cummins. He has worked in nearly every part of our company during his 31-year tenure. He has helped many business leaders, including me, figure out where the business needs improvement and what to focus on first. Pat has also coached and developed many of our financial leaders in the company, inspiring them to be the best that they can be.” Ward’s successor, Mark Smith, has also worked with Cummins for more than 20 years. He has served as the vice president of financial operations and has led investor relations, business planning and analysis, and capital management departments at Cummins. ## Stock price update Cummins had a positive week. The stock gained ~2.5% and closed at $139.54 for the week ending January 11, 2019. The gains helped the stock to narrow its 100-day moving average gap and traded 1.5% below the 100-day moving average price of $141.69. So far in 2019, the stock has gained 6.0%. Cummins peers Caterpillar (CAT), Deere (DE), and General Electric (GE) have gained 5.2%, 9.0%, and 19%, respectively. Last week, Cummins outperformed the Invesco S&P 500 Equal Weight Industrials ETF (RGI), which gained 4.0%. The fund has invested 1.5% of its holdings in Cummins as of January 11, 2019. Cummins has a relative strength index of 57, which indicates that the stock isn’t overbought or oversold. Browse this series on Market Realist: * Part 1 - Honeywell to Collaborate with Optoro on Reverse Logistics * Part 2 - Deere Gets Six Agricultural Innovation Awards
Wall Street was set to open lower on Monday, after Citigroup kicked off the earnings season on a dour note, adding to worries over a slowdown in global economic growth that resurfaced after data showed an unexpected drop in China's trade. Citigroup Inc fell 0.7 percent in premarket trading after reporting a surprise drop in quarterly revenue, hurt by volatility in financial markets at the end of the year. Other U.S. banks including JPMorgan Chase & Co, Goldman Sachs Group Inc, Morgan Stanley and Bank of America Corp dropped between 0.8 percent and 1.1 percent.
Key Updates from the Industrial Sector Last Week (Continued from Prior Part) ## Deere gets six AE50 awards On January 10, 2019, Deere (DE) announced that it had received six AE50 awards. The reward is presented by the American Society of Agricultural and Biological Engineers for innovative product-engineering designs in agriculture. It recognizes 50 innovative products chosen by international engineering experts. Deere received awards for the following products: * Command Pro joystick for 6R tractors * Bale mobile app * 2660VT, a variable-intensity tillage tool * Tracks * 700FD Hydraflex Draper * a machine performance app that’s part of the Generation 4 command center These kinds of innovations help Deere to launch new products and further help farmers to save time, costs, and labor. Joel Dawson, director of production and precision agriculture for Deere, said, “This year’s AE50 Awards reaffirms the innovative spirit of our employees and illustrates our company’s commitment to bringing those linked to the land the most useful, high-quality products possible. Around the globe, John Deere engineers work tirelessly to create exciting new products and technology to benefit our customers.” ## Deere’s stock price Deere stock remained positive for the week. The stock gained ~4.4% and closed at $158.28 for the week ending January 11. The gains resulted in Deere trading 7.3% above its 100-day moving average price of $147.45. So far in 2019, Deere has gained ~9.0%. Deere’s peers Caterpillar (CAT), AGCO (AGCO), and CNH Industrial (CNHI) have fallen 5.2%, 13.3%, and 7.4%, respectively. Deere’s 14-day relative strength index score of 60 indicates that the stock isn’t overbought or oversold. Investors could hold Deere indirectly through the iShares MSCI Global Agriculture Producers ETF (VEGI), which had 15.2% of its portfolio invested in Deere as of January 11, 2019. Continue to Next Part Browse this series on Market Realist: * Part 1 - Honeywell to Collaborate with Optoro on Reverse Logistics * Part 3 - Cummins Announces CFO Change
NOTE: On January 11, 2019, the press release was corrected as follows: The first sentence of the methodology paragraph was changed to: The methodologies used in rating Caterpillar Inc. and Peoria (County of), IL were Global Manufacturing Companies published in June 2017, and Captive Finance Subsidiaries of Nonfinancial Corporations published in December 2015. Revised release follows. New York, January 10, 2019 -- Moody's Investors Service ("Moody's") changed the rating outlook for Caterpillar, Inc. (CAT), Caterpillar Financial Services Corporation (CFSC), and their supported subsidiaries to positive from stable, and affirmed the ratings including the A3 long-term and Prime-2 short-term ratings of CAT, CFSC and subsidiaries.
The major stock indexes were modestly lower early Friday. Netflix stock was upgraded ahead of next week's earnings announcement.
On January 8, 2019, Deere (DE) announced the launch of three L-series wheel loaders, the 524L, the 544L, and the 624L. Deere will display 544L in the upcoming exhibition, the World of Concrete, which will be held from January 22 to January 25. Chris Cline, Deere’s Construction and Forestry segment’s product marketing manager for wheel loaders, said, “Our next generation of wheel loaders improves upon the legacy of the John Deere wheel loader line.
Investing.com - Wall Street rallied on Wednesday as the Federal Reserve's December meeting minutes reaffirmed investor expectations that the central bank will likely rein in rate hikes.
# Caterpillar Inc ### NYSE:CAT View full report here! ## Summary * Perception of the company's creditworthiness is negative * ETFs holding this stock are seeing positive inflows * Bearish sentiment is low * Economic output for the sector is expanding but at a slower rate ## Bearish sentiment Short interest | Positive Short interest is extremely low for CAT with fewer than 1% of shares on loan. This could indicate that investors who seek to profit from falling equity prices are not currently targeting CAT. ## Money flow ETF/Index ownership | Positive ETF activity is positive. Over the last month, growth of ETFs holding CAT is favorable, with net inflows of $24.14 billion. This is among the highest net inflows seen over the last one-year and the rate of additional inflows appears to be increasing. ## Economic sentiment PMI by IHS Markit | Negative According to the latest IHS Markit Purchasing Managers' Index (PMI) data, output in the Industrials sector is rising. The rate of growth is weak relative to the trend shown over the past year, however, and is easing. ## Credit worthiness Credit default swap | Negative The current level displays a negative indicator. CAT credit default swap spreads are near their highest levels for the past 1 year, which indicates the market's more negative perception of the company's credit worthiness. Please send all inquiries related to the report to email@example.com. Charts and report PDFs will only be available for 30 days after publishing. This document has been produced for information purposes only and is not to be relied upon or as construed as investment advice. To the fullest extent permitted by law, IHS Markit disclaims any responsibility or liability, whether in contract, tort (including, without limitation, negligence), equity or otherwise, for any loss or damage arising from any reliance on or the use of this material in any way. Please view the full legal disclaimer and methodology information on pages 2-3 of the full report.
Shares of Boeing (BA) surged 3.3% Tuesday after the aerospace powerhouse reported record-setting aircraft deliveries in 2018 to help it top rival Airbus (EADSY). Boeing, however, fell just shy of its own delivery target. So, let's see what investors should expect from BA's Q4 and fiscal 2019 financial results.
At this point, Caterpillar (NYSE:CAT) looks almost absurdly cheap. Caterpillar earnings doubled in 2017, and are guided up close to 70% this year. Yet Caterpillar stock trades at just 11x EPS guidance, and the CAT stock price actually has declined 19% over the past year. But CAT is a cyclical stock, which means investors need to consider much more than just one- and two-year growth periods. After all, Caterpillar earnings are rising 200%+ over two years but they had declined 60% over the previous four. Revenue dropped each year over that period. It was the first time ever (including during the Great Depression) that Caterpillar sales had fallen for four consecutive years. InvestorPlace - Stock Market News, Stock Advice & Trading Tips * The 7 Best Stocks in the Entrepreneur Index In theory, a cyclical stock like Caterpillar stock should be cheap at the top of the cycle. And the weakness in broad markets, along with an inverted yield curve, strongly suggests that the U.S. and global economies indeed are near a top. If that's the case, the CAT stock price isn't nearly as cheap as it looks. But there are other factors to consider when it comes to Caterpillar stock. Three other key questions will help determine whether the market was right in selling off CAT or if the decline from January highs has created a buying opportunity. ### 1\. Where Are We In the Cycle? Again, the most important question for the CAT stock price is understanding where we are in the cycle. In theory, a cyclical like CAT or John Deere (NYSE:DE) should see its earnings multiple contract at the top of the cycle and expand at the bottom. That same phenomenon helps explain why chip stock Micron Technology (NASDAQ:MU) trades at less than 4x earnings. Indeed, even when the CAT stock price hit multi-year lows in early 2016, the stock still traded at a high-teen multiple to what investors believed were depressed earnings. Now, investors see something closer to a peak coming in 2019 or 2020 or worse if the economy turns. Few stocks have more political risk than CAT, as I wrote last month. And so the compressed multiple makes some sense. Of course, that multiple only makes sense if the cycle actually is turning. And for all the worries in the market right now, there isn't a lot of evidence that turn is coming yet. In fact, Caterpillar posted a blowout Q3, with operating profit growth of 41%. YTD, revenue in Asia has risen 36% - with particular strength in China For investors who believe the recent market sell-off is overdone, Caterpillar stock at least has to be given a long look. ### 2\. Can Margins Go Any Higher? From a cyclical standpoint, however, there is a concern in Caterpillar's numbers. Operating margins are at a peak. In fact, they're higher now than in 2012, when Caterpillar benefited from the so-called "commodity supercycle". For a cyclical stock, that's not necessarily good news. Peak margins generally aren't sustainable. Indeed, adjusted margins are 16.6% over the past four quarters, according to the company's Q3 presentation. They were just 7.2% in 2016 - and averaged 11% over the past six years. If those margins settle back in even the 13-14% range, earnings drop over 10%, and the CAT stock price looks closer to 13-14x earnings. That's not far from the stock's historical rang, and in that context Caterpillar stock isn't all that cheap. That said, it's possible that margins can at least stay around current levels. Caterpillar took billions of dollars in cost out of the business over the past couple of years. Those costs have risen of late - Caterpillar has added flexible workers of late - but been leveraged by revenue growth. As such, margins probably should be higher than even the salad days of 2011 and 2012. The question is how much higher and for how long. ### 3\. Will Cost Cuts Have a Cost? That said, one interesting question is whether those cost cuts will have an impact at some point. Caterpillar's workforce dropped 20% between the end of 2013 and the end of 2017. It's risen 7% over the past year, as sales have rebounded. But Caterpillar still is making the same amount of revenue on the back of roughly 15% fewer workers. Is that, itself, sustainable? I've long worried it might not be but performance over the past seven quarters would seem to suggest otherwise. It's possible if not likely at this point that Caterpillar simply is leaner. But even that means that there's likely little room left for improvement and not much the company itself can do to move margins much higher. ### 4\. Is Caterpillar Stock the Best Cyclical Play? Overall, it does look from here like the CAT stock price is a bit too cheap. Even assuming the ~$12 EPS this year is benefiting from cyclical help, recent cost cuts look sustainable at this point. Tax reform has helped net profit as well. It's not hard to model 'mid-cycle' EPS of $9-10, with a mid-teen multiple suggesting the CAT stock price should be in the $140 range, up ~10% or so from current levels. The biggest issue, though, is whether Caterpillar stock is the best cyclical stock for investors who believe the sell-off has gone too far. As David Schawel pointed out on Twitter this week, cyclical stocks never have been as cheap on a relative basis as they are right now. Construction industry stocks have been hammered, and several look cheap, including homebuilders like Lennar (NYSE:LEN) and distributors like GMS (NYSE:GMS) and Beacon Roofing Supply (NASDAQ:BECN). CAT is a bit of a China play at this point - and there's no shortage of value stocks with exposure to that market. A 2.7% dividend yield does help the case for Caterpillar stock, admittedly. Cyclical risk probably isn't quite as large here. Still, there are a number of good, cheap cyclicals out there. Caterpillar stock is one of them. But I'm skeptical it's the best or necessarily the cheapest. As of this writing, Vince Martin is long shares of GMS Inc. He has no positions in any other securities mentioned. ### More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 7 Stocks to Buy Down 20% in December * 5 Chinese Stocks to Avoid Now (But Buy Later) * 3 Big Gainers That Easily Could Be the Best Stocks to Buy Compare Brokers The post The Four Key Questions to Consider Before Buying Caterpillar Stock appeared first on InvestorPlace.
U.S. stocks rose on Tuesday, as industrial stocks and Amazon helped extend Wall Street's rebound for a third day on rising hopes of progress in U.S.-China trade talks. U.S. President Donald Trump earlier tweeted that the talks were going "very well". Trade-sensitive stocks such as Boeing Co and Caterpillar Inc rose more than 2 percent, boosting the Dow Jones Industrial Average.
U.S. stocks were set to gain for a third day on Tuesday, lifted by hopes that the United States and China would strike a deal to end their months-long trade war that has battered financial markets. U.S. President Donald Trump said in a tweet that talks with China are going "very well". "With the U.S. and China in talks to de-escalate their trade conflict, the central bank showing a willingness to slow its tightening cycle and the economy still performing well, the markets may be looking a little more attractive," Craig Erlam, senior market analyst at Oanda in London, wrote in a note.
Powell, Jobs, Trade Talk News Helped Markets Jump on January 4 ## Stock market soared After a massive sell-off on January 3, the major US indexes made a sharp recovery last Friday on several pieces of good news, thereby helping the market to end the first week of 2019 on a positive note finally. The Dow Jones, the S&P 500, and the NASDAQ Composite gained 3.3%, 3.4%, and 4.3%, respectively, on January 4. The indexes ended the first three trading days of the year with returns of 0.5%, 1%, and 1.6%, respectively. All 30 Dow Jones components recorded a sharp upswing on January 4. With an increase of 6.1%, Intel (INTC) stock was the biggest gainer among the Dow 30 components last Friday, followed by Caterpillar’s (CAT) and Boeing’s (BA) intraday gains of 5.5% and 5.2%, respectively. Apple (AAPL) also bounced back with a 4.3% rise last Friday. The stock had plunged nearly 10% the day before after warning about a possible quarterly sales target miss due to trade tensions between the US and China. Apple’s sales target miss forecast and weak US factory activity data had triggered a massive broader market sell-off on January 3, sending all the three major US indexes down by over 2.5%. The Technology Select Sector SPDR Fund (XLK) invests 16.8% of its funds in Apple. ## Factors driving Friday’s rally Last Friday’s stock market rally was a result of a trifecta of good news: a strong US job report, encouraging remarks on the interest rate policy from Fed Chair Jerome Powell, and progress with the US-China trade talks. The first positive news came in the form of the December 2018 job report published by the US Bureau of Labor Statistics, which says the domestic economy created a significantly higher-than-expected job report last month. According to the data, non-farm payrolls surged by 312,000 in December and surpassed economists’ consensus estimates of 176,000 polled by the Dow Jones. Additionally, monthly wages increased 3.2% from the year-ago quarter and 0.4% from the previous quarter. The latest data from the Bureau of Labor discarded concerns of a slowdown in the US economy. Later in the day, Powell at the American Economic Association event hinted that the central bank is ready to shift its stance on monetary policy and is flexible in deciding the timing of interest rate hikes. At the end of December, Powell had suggested raising interest rates three times in 2019. However, last Friday’s remarks pointed to a more liberal monetary policy from the Fed, and analysts and investors are expecting fewer or no hikes this year. Additionally, news of trade talks between the US and China, which are slated to begin today, also made investors think that the two largest economies may resolve their trade dispute this time.
U.S. equities pushed higher Thursday as investors digested disappointing holiday sales results from several major retailers and a slew of commentary from Federal Reserve Chairman Jerome Powell.