Should the global economy show signs of stabilizing, particularly as it relates to industrial activity, Caterpillar would appear relatively cheap at ~$141 per share as of the end of the October 29 trading session. Recent signs have not been promising. Exports out of South Korea, a barometer for the global economy, continue to plummet while macroeconomic readings in the EU and North America are showing signs of a major slowdown materializing as we speak (particularly in the Eurozone, but that appears to be spreading to the US economy as well). China’s economy continues to feel the heat from the US-China trade war. The low end of our fair value estimate range stands at $125 per share of CAT, meaning that under more pessimistic assumptions, Caterpillar appears fairly valued as of this writing.
This page is available to subscribers only. To gain access to members only content (including this research piece), click here to subscribe. With a subscription, you'll have access to all of our premium commentary, equity reports, dividend reports and Best Ideas Newsletter and Dividend Growth Newsletter, as well as receive discounts on all of our modeling tools and products. Financial advisers and institutional investors have even more to choose from!