Caterpillar (NYSE:CAT) Stock Falls 5% – Time to Sell?

Caterpillar Inc. (NYSE:CAT) shares dropped 5% on Thursday. The stock traded as low as $695.33 and last traded at $703.2980. 3,044,472 shares traded hands during mid-day trading, an increase of 8% from the average session volume of 2,822,256 shares. The stock had previously closed at $740.21.

Caterpillar News Roundup

Here are the key news stories impacting Caterpillar this week:

• Positive Sentiment: Wall Street expects earnings growth in Caterpillar’s upcoming report, and the company’s history of earnings surprises, combined with favorable estimate revisions and a positive Earnings ESP setup, points to potential for another beat. Caterpillar Reports Next Week: Wall Street Expects Earnings Growth
• Positive Sentiment: Analysts see a possible near-term turnaround after a recent decline, citing a hammer chart pattern that may indicate support and broad upward revisions to earnings estimates. Bears Are Losing Control Over Caterpillar
• Positive Sentiment: Caterpillar continues to benefit from strong cash flow, a record $72 billion backlog and a raised 2026 sales-growth outlook. The unchanged dividend still reflects ongoing capital-return support, although investors are watching for a future increase. CAT Keeps Dividend Unchanged
• Positive Sentiment: Brokerage data cited a consensus price target of $967.83, implying analysts remain substantially more optimistic than the recent trading level. Caterpillar Consensus Target Price

Analyst Ratings Changes

CAT has been the subject of a number of research reports. Weiss Ratings raised Caterpillar from a “buy (b-)” rating to a “buy (b)” rating in a research report on Wednesday, October 14th. Zacks Research lowered Caterpillar from a “strong-buy” rating to a “hold” rating in a research note on Monday, October 5th. Sanford C. Bernstein restated a “market perform” rating and issued a $749.00 price objective on shares of Caterpillar in a report on Wednesday, October 14th. President Capital initiated coverage on Caterpillar in a research note on Friday, September 18th. They issued a “buy” rating and a $999.00 price objective on the stock. Finally, Truist Financial decreased their target price on Caterpillar from $1,225.00 to $1,100.00 and set a “buy” rating for the company in a report on Monday, October 5th. Fifteen analysts have rated the stock with a Buy rating and twelve have given a Hold rating to the stock. According to data from MarketBeat, the stock currently has an average rating of “Moderate Buy” and an average price target of $967.83.

Caterpillar Price Performance

The company’s fifty day moving average is $802.23 and its two-hundred day moving average is $856.84. The company has a debt-to-equity ratio of 1.65, a quick ratio of 0.85 and a current ratio of 1.37. The firm has a market cap of $323.29 billion, a price-to-earnings ratio of 30.26, a price-to-earnings-growth ratio of 1.24 and a beta of 1.58.

Caterpillar (NYSE:CAT) last announced its quarterly earnings results on Tuesday, August 4th. The industrial products company reported $8.17 earnings per share (EPS) for the quarter, beating the consensus estimate of $6.22 by $1.95. Caterpillar had a return on equity of 55.53% and a net margin of 14.51%. The firm had revenue of $20.54 billion during the quarter, compared to the consensus estimate of $19.34 billion. During the same period in the prior year, the firm earned $4.72 EPS. The firm’s quarterly revenue was up 23.7% compared to the same quarter last year. Equities research analysts forecast that Caterpillar Inc. will post 27.74 EPS for the current year.

Caterpillar Announces Dividend

The business also recently announced a quarterly dividend, which will be paid on Thursday, November 19th. Stockholders of record on Monday, October 26th will be given a $1.63 dividend. The ex-dividend date of this dividend is Monday, October 26th. This represents a $6.52 annualized dividend and a dividend yield of 0.9%. Caterpillar’s dividend payout ratio is presently 28.06%.

Insider Activity

In related news, CEO Joseph E. Creed sold 32,401 shares of the firm’s stock in a transaction dated Friday, August 28th. The stock was sold at an average price of $808.98, for a total transaction of $26,211,760.98. Following the sale, the chief executive officer directly owned 34,555 shares in the company, valued at approximately $27,954,303.90. This trade represents a 48.39% decrease in their position. The sale was disclosed in a filing with the SEC, which can be accessed through this link. Company insiders own 0.33% of the company’s stock.

Hedge Funds Weigh In On Caterpillar

Institutional investors and hedge funds have recently bought and sold shares of the stock. BlackRock Inc. purchased a new stake in shares of Caterpillar during the second quarter valued at approximately $40,457,153,000. State Street Corp boosted its stake in shares of Caterpillar by 4.0% in the second quarter. State Street Corp now owns 36,276,960 shares of the industrial products company’s stock valued at $37,120,529,000 after purchasing an additional 1,396,356 shares during the period. Bank of America Corp DE purchased a new position in shares of Caterpillar in the second quarter valued at $5,818,150,000. Bank of New York Mellon Corp acquired a new stake in Caterpillar during the 2nd quarter valued at $3,192,710,000. Finally, Legal & General Group Plc acquired a new stake in Caterpillar during the 2nd quarter valued at $2,783,451,000. Hedge funds and other institutional investors own 70.98% of the company’s stock.

About Caterpillar

Caterpillar Inc is a manufacturer of construction, mining, and industrial equipment. Its product portfolio includes excavators, bulldozers, wheel loaders, motor graders, articulated trucks, and other machinery used in construction, infrastructure development, mining, quarrying, forestry, and related industries. The company also produces diesel and natural gas engines, industrial gas turbines, generator sets, and other power-generation and transportation equipment.

Caterpillar operates through businesses focused on construction industries, resource industries, and energy and transportation.