Analysts Divided On Caterpillar's Outlook Amid Pricing Pullback And Market Volatility - Details

Core Viewpoint - BofA Securities analyst Michael Feniger has lowered the price forecast for Caterpillar, Inc. from $452 to$414 while maintaining a Buy rating, following mixed fourth-quarter FY24 results that showed total sales of $16.215 billion, which fell short of the consensus estimate of$16.411 billion, although adjusted earnings per share (EPS) of $5.14 exceeded the consensus of$4.99 [1][2]. Group 1: Financial Performance - Caterpillar reported total sales and revenue of $16.215 billion for the fourth quarter, missing the consensus estimate of$16.411 billion [1]. - Adjusted EPS was $5.14, surpassing the consensus estimate of$4.99 [1]. - For 2025, sales are expected to decline approximately 1% due to unfavorable pricing and lower interest income [2]. Group 2: Pricing and Inventory - Construction pricing fell by 4.6% in the fourth quarter, compared to a decline of 2.1% in the third quarter, with similar challenges anticipated in the first quarter of 2025 [3]. - Dealers reduced machine inventory by $1.6 billion in the fourth quarter, which is expected to create headwinds in the first half of FY25 [3]. - Feniger adjusted EPS estimates for 2025 down to$19.25 from $21 and for 2026 down to$23 from $25 based on softer guidance [3]. Group 3: Analyst Ratings and Market Position - Oppenheimer analyst Kristen Owen maintained a Perform rating, noting challenges in CI and RI demand but positive contributions from data centers supporting EPS outlook [4]. - Goldman Sachs analyst Jerry Revich reiterated a Buy rating, raising the price forecast from$442 to $456, citing growth driven by increasing content and a market shift towards high-return products [5]. - CAT shares were down 0.79$372.02 during the last check on Friday [5].