CAT - Embedded Expectations Analysis - 2021 03 03
Caterpillar Inc. (CAT:USA) currently trades above corporate averages relative to UAFRS-based (Uniform) earnings, with a 28.9x Uniform P/E. At these levels, the market has bullish expectations for the firm, but management may be concerned about dealer inventory changes, new product offerings, and overall sales declinesSpecifically, management may lack confidence in their ability to reinstate share repurchases, increase quarterly dividends, and expand and invest in new product offerings during the pandemic. Furthermore, they may have concerns about oil price volatility, the launch of their GX line of excavators in China, and continued declines in machine hours. Management may also lack confidence in their ability to sustain current inventory levels, mitigate sales declines, and manage restructuring costs. Moreover, they may have concerns about the impact of dealer inventory changes on sales, and they may be overstating the reach of their global dealer network
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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