CAT - Embedded Expectations Analysis - 2018 09 10
Caterpillar Inc. (CAT:USA) currently trades at recent lows relative to UAFRS-based (Uniform) Earnings, with a 19.7x Uniform P/E. Even at these levels, the market has bullish expectations for the firm, and management is confident about top-line growth, profitability and shareholder returnsSpecifically, management is confident in their ability to sustain growth in sales and revenue, particularly in the cruise sector. Moreover, they are confident in their ability to continue delivering on the commitments they made at their Investor Day last September, maintaining high profit per share and returning capital to shareholders. Additionally, they are confident in their ability to sustain high operating margins, and about the sustainability of strong aftermarket mining orders. Finally, they are confident about the sustainability of sales growth in the Asia-Pacific region, driven by continued investment in building construction and infrastructure
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.
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