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 34th percentile in terms of potential gain offered. We should note, though, that the most conservative analysis suggests this stock will yield negative results -- and thus may be a potential short opportunity. As for the metrics that stood out in our discounted cash flow analysis of Caterpillar Inc, consider:
In the past 5.52 years, Caterpillar Inc has a compound free cash flow growth rate of 0.02%; that's higher than merely 24.69% of free cash flow generating stocks in the Industrials sector.
Caterpillar Inc's weighted average cost of capital (WACC) is 8%; for context, that number is higher than merely 9.09% of tickers in our DCF set.
CAT's estimated cost of debt, based largely on its market capitalization and its interest coverage ratio, is 3%; for context, that number is higher than merely 9.09% 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 ADT, TIKK, TXT, CLCT, and GWW.
In this article we are going to list the 15 largest industrial companies in the US. Click to skip ahead and jump to the 5 largest industrial companies in the US. Before we get started, let’s first try to understand what an industrial company is. After all, all companies operate in either individual or multiple […]
Caterpillar Inc. (NYSE: CAT) will release fourth-quarter and full-year 2020 financial results at 5:30 a.m. CST on Friday, January 29. The release will be available at investors.caterpillar.com/financials/quarterly-results and the full text of the news release will also be available on PR Newswire at approximately 5:30 a.m. CST. The news release will be furnished to the U.S. Securities and Exchange Commission (SEC) via a Current Report on Form 8-K in compliance with applicable SEC rules.
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