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Caterpillar (CAT) Hits 52-Week High: What's Driving the Stock?
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Shares of Caterpillar Inc. (CAT - Free Report) scaled a new 52-week high of $258.58 on Jan 13, before closing the session a tad lower at $258.46.
CAT has a market capitalization of around $134.5 billion. Over the past year, the CAT stock has gained 12.9% against the 11.2% growth of the industry. The S&P 500 composite has declined 15.6% in the same time frame.
Image Source: Zacks Investment Research
What’s Driving Caterpillar?
The company has impressed investors by delivering growth in both its top and the bottom line for the last few quarters. CAT’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, the average being 14.7%.
Adjusted earnings per share were $3.95 in third-quarter 2022, which marked a 48.5% improvement year over year courtesy of strong demand across its end markets. This, along with favorable price realization led to improved earnings despite unfavorable manufacturing costs (mainly higher material and freight costs). The backlog at the end of the quarter was an impressive $30 billion. This bodes well for CAT’s top-line performance in the days ahead.
In North America, demand in both residential and non-residential construction sectors is likely to bolster demand for Caterpillar’s construction equipment. The perked-up investment in roads, bridges, airports and waterways as a result of the U.S. Infrastructure Investment and Jobs Act represents a huge opportunity for CAT.
In the Resource Industries segment, mining orders are on an uptrend, auguring well for the segment. Miners are increasingly relying on autonomous systems to enhance productivity and reduce costs and emissions. Therefore, CAT is enhancing its autonomous capabilities and bringing innovative products to the market.
Caterpillar recently announced that it is investing in Lithos Energy, Inc., a U.S.-based battery technology company that produces lithium-ion battery packs. This is in sync with the company’s commitment to supporting customers in their energy transition journey with lower-carbon advanced power technologies for its hybrid and full-electric machines as well as power generation products.
To this end, CAT recently displayed four electric construction machine prototypes, including battery prototypes, at bauma 2022 in Munich, Germany. It also successfully demonstrated its first battery electric 793 large mining truck at its Tucson Proving Ground in Arizona.
Earnings estimates for Caterpillar have also been going up over the past 60 days. The Zacks Consensus Estimate for 2022 bottom line has increased around 0.1% and the same for 2023 has moved up 2.6%. The consensus estimate for third-quarter 2022 earnings (scheduled to be reported on Jan 31) has also been revised 0.8% upward over the same time frame. The favorable estimate revisions instill investor’s confidence in the stock.
Zacks Rank & Stocks to Consider
Caterpillar currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks from the Industrial Products sector are KnowBe4, Inc. , Deere & Company (DE - Free Report) and O-I Glass, Inc. (OI - Free Report) . KNBE sports a Zacks Rank #1 (Strong Buy) at present, while DE and OI carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
KnowBe4’s earnings surprise in the last four quarters was 216.7%, on average. The Zacks Consensus Estimate for the company’s 2022 earnings is pegged at 25 cents, indicating a year-over-year increase of 127.3%. The consensus estimate for 2022 earnings has moved up 25% in the past 60 days. KNBE’s shares have gained 18% in a year.
The Zacks Consensus Estimate for Deere & Company’s fiscal 2023 earnings per share is pegged at $27.85, suggesting an increase of 19.6% from the last year’s reported figure. The consensus estimate for fiscal 2023 earnings moved 5.2% upward in the last 60 days. DE has a trailing four-quarter average earnings surprise of 7.1%. Its shares gained 16% in the last year.
OI Glass has an average trailing four-quarter earnings surprise of 14.9%. The Zacks Consensus Estimate for OI’s 2022 earnings is pegged at $2.25 per share. This indicates a 22.9% increase from the prior-year reported figure. The consensus estimate for 2022 earnings has been unchanged in the past 60 days. OI’s shares gained 37% in the last year.
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Caterpillar (CAT) Hits 52-Week High: What's Driving the Stock?
Shares of Caterpillar Inc. (CAT - Free Report) scaled a new 52-week high of $258.58 on Jan 13, before closing the session a tad lower at $258.46.
CAT has a market capitalization of around $134.5 billion. Over the past year, the CAT stock has gained 12.9% against the 11.2% growth of the industry. The S&P 500 composite has declined 15.6% in the same time frame.
Image Source: Zacks Investment Research
What’s Driving Caterpillar?
The company has impressed investors by delivering growth in both its top and the bottom line for the last few quarters. CAT’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, the average being 14.7%.
Adjusted earnings per share were $3.95 in third-quarter 2022, which marked a 48.5% improvement year over year courtesy of strong demand across its end markets. This, along with favorable price realization led to improved earnings despite unfavorable manufacturing costs (mainly higher material and freight costs). The backlog at the end of the quarter was an impressive $30 billion. This bodes well for CAT’s top-line performance in the days ahead.
In North America, demand in both residential and non-residential construction sectors is likely to bolster demand for Caterpillar’s construction equipment. The perked-up investment in roads, bridges, airports and waterways as a result of the U.S. Infrastructure Investment and Jobs Act represents a huge opportunity for CAT.
In the Resource Industries segment, mining orders are on an uptrend, auguring well for the segment. Miners are increasingly relying on autonomous systems to enhance productivity and reduce costs and emissions. Therefore, CAT is enhancing its autonomous capabilities and bringing innovative products to the market.
Caterpillar recently announced that it is investing in Lithos Energy, Inc., a U.S.-based battery technology company that produces lithium-ion battery packs. This is in sync with the company’s commitment to supporting customers in their energy transition journey with lower-carbon advanced power technologies for its hybrid and full-electric machines as well as power generation products.
To this end, CAT recently displayed four electric construction machine prototypes, including battery prototypes, at bauma 2022 in Munich, Germany. It also successfully demonstrated its first battery electric 793 large mining truck at its Tucson Proving Ground in Arizona.
Earnings estimates for Caterpillar have also been going up over the past 60 days. The Zacks Consensus Estimate for 2022 bottom line has increased around 0.1% and the same for 2023 has moved up 2.6%. The consensus estimate for third-quarter 2022 earnings (scheduled to be reported on Jan 31) has also been revised 0.8% upward over the same time frame. The favorable estimate revisions instill investor’s confidence in the stock.
Zacks Rank & Stocks to Consider
Caterpillar currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks from the Industrial Products sector are KnowBe4, Inc. , Deere & Company (DE - Free Report) and O-I Glass, Inc. (OI - Free Report) . KNBE sports a Zacks Rank #1 (Strong Buy) at present, while DE and OI carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
KnowBe4’s earnings surprise in the last four quarters was 216.7%, on average. The Zacks Consensus Estimate for the company’s 2022 earnings is pegged at 25 cents, indicating a year-over-year increase of 127.3%. The consensus estimate for 2022 earnings has moved up 25% in the past 60 days. KNBE’s shares have gained 18% in a year.
The Zacks Consensus Estimate for Deere & Company’s fiscal 2023 earnings per share is pegged at $27.85, suggesting an increase of 19.6% from the last year’s reported figure. The consensus estimate for fiscal 2023 earnings moved 5.2% upward in the last 60 days. DE has a trailing four-quarter average earnings surprise of 7.1%. Its shares gained 16% in the last year.
OI Glass has an average trailing four-quarter earnings surprise of 14.9%. The Zacks Consensus Estimate for OI’s 2022 earnings is pegged at $2.25 per share. This indicates a 22.9% increase from the prior-year reported figure. The consensus estimate for 2022 earnings has been unchanged in the past 60 days. OI’s shares gained 37% in the last year.