CFRA, an independent research provider, has provided MT Newswires with the following research alert. Analysts at CFRA have summarized their opinion as follows:
Shares are trading higher pre-market following CAT’s Q4 print, with the company beating EPS expectations and providing upbeat guidance for 2024. We lift our price target to $360 from $345, valuing shares at 16.1x our 2025 EPS outlook (initiated at $22.35; 2024 EPS adjusted to $21.41 from $21.15), in line with CAT’s historical forward average. CAT posts Q4 operating EPS of $5.23 vs. $3.86 (+35% Y/Y), surpassing the consensus forecast of $4.75. As expected, Y/Y sales growth cooled into the single-digits (+3%), led by a 12% increase in Energy & Transportation sales. Improved profitability drove earnings expansion during Q4, with adj-operating margins widening to 18.9% (+190 bps) on favorable price realization, manufacturing costs, and absence of a goodwill impairment. CAT’s 2024 outlook implies stabilization of dealer inventories (a key concern prior to Q4 print), which should bode well for Construction/Resource sales. Additionally, pricing is expected to hold up and exceed manufacturing costs for the full year.