Raising Our FVE for Caterpillar on Expectations of Stronger Revenue Growth and Margins
After further review of Caterpillar's year-end results, we are increasing our fair value estimate to $125 from $101 per share. Overall, we were surprised by the acceleration of equipment sales recovery in recent months and have updated our valuation model to better reflect the revenue growth and operating margin prospects that we now anticipate.We now project revenue will grow at an 8.7% CAGR from 2016-21, whereas previously we assumed 7%. We believe this updated growth rate better reflects the...
Caterpillar is a manufacturer of construction and mining equipment, diesel and natural gas engines, industrial gas turbines and diesel-electric locomotives. The company segments include: Construction Industries, which supports customers using machinery in infrastructure, forestry and building construction; Resource Industries, which supports customers using machinery in mining, heavy construction, quarry and aggregates, waste and material handling applications; Energy and Transportation, which supports customers in oil and gas, power generation, marine, rail and industrial applications, including Cat? machines; and Financial Products, which provides financing and related services.
Morningstar, Inc. is a leading provider of independent investment research in North America, Europe, Australia, and Asia. The company offer an extensive line of products and services for individual investors, financial advisors, asset managers, and retirement plan providers and sponsors.
Morningstar provides data on approximately 530,000 investment offerings, including stocks, mutual funds, and similar vehicles, along with real-time global market data on more than 18 million equities, indexes, futures, options, commodities, and precious metals, in addition to foreign exchange and Treasury markets. Morningstar also offers investment management services through its investment advisory subsidiaries and had approximately $185 billion in assets under advisement and management as of June 30, 2016.
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