Caterpillar is a manufacturer of construction and mining equipment, diesel and natural gas engines, industrial gas turbines and diesel-electric locomotives. The company principally operates through its three product segments - Construction Industries, Resource Industries and Energy & Transportation - and also provides financing and related services through its Financial Products segment. The company was founded in 1925 and is based in Peoria, Illinois.
CAT Price Forecast Based on DCF Valuation
DCF Fair Value Target:
Below please find a table outlining a discounted cash flow forecast for CAT, in which we model out valuation assuming a variety of terminal growth rates. To summarize, we found that Caterpillar Inc ranked in the 26th percentile in terms of potential gain offered. Our DCF analysis suggests the stock is overvalued by about 57.33%. In terms of the factors that were most noteworthy in this DCF analysis for CAT, they are:
In the past 5.47 years, Caterpillar Inc has a compound free cash flow growth rate of -0.04%; that's higher than only 15.93% of free cash flow generating stocks in the Industrials sector.
Caterpillar Inc's weighted average cost of capital (WACC) is 7%; for context, that number is higher than merely 7.51% of tickers in our DCF set.
CAT's estimated cost of debt, based largely on its market capitalization and its interest coverage ratio, is 2%; for context, that number is higher than merely 7.51% of tickers in our DCF set.
Terminal Growth Rate in Free Cash Flow
Return Relative to Current Share Price
For other companies in the Industrials that have a similar discounted cashflow valuation profile (and ensuing price forecasts) as CAT, try DCO, HSII, ROK, SYEV, and UPS.
LOS ANGELES, United States: The report is an all-inclusive research study of the global Power Generator Product market taking into account the growth factors, recent trends, developments, opportunities, and competitive landscape. The market analysts and researchers have done extensive analysis
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