Shares of Caterpillar (NYSE:CAT) surged today after it reported earnings for its second quarter of Fiscal Year 2023. Adjusted earnings per share came in at $5.55, which beat analysts’ consensus estimate of $4.57 per share. Sales increased by 21.8% year-over-year, with revenue hitting $17.3 billion. This was $770 million above expectations.
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Caterpillar also saw impressive margin expansion on a year-over-year basis. Indeed, the adjusted operating margin increased from 13.8% to 21.3%. This came despite the firm’s rising production costs, which it was able to pass on to customers.
Is Caterpillar a Buy, Hold, or Sell?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on CAT stock based on four Buys, three Holds, and one Sell assigned in the past three months, as indicated by the graphic above. Nevertheless, the average price target of $254 per share implies over 10% downside potential.