Caterpillar (CAT – Research Report), the Industrials sector company, was revisited by a Wall Street analyst yesterday. Analyst Chad Dillard from Bernstein maintained a Hold rating on the stock and has a $304.00 price target.
Protect Your Portfolio Against Market Uncertainty
- Discover companies with rock-solid fundamentals in TipRanks' Smart Value Newsletter.
- Receive undervalued stocks, resilient to market uncertainty, delivered straight to your inbox.
Chad Dillard has given his Hold rating due to a combination of factors that reflect both opportunities and challenges for Caterpillar. The company is experiencing significant growth in its services revenue, with increased service contract penetration and enhanced equipment connectivity driving this expansion. Additionally, the power generation segment is benefiting from the cloud and AI data center build-out, contributing to a robust revenue growth rate.
However, there are also headwinds that justify the Hold rating. The price-cost dynamics present a challenge, as demand softening may lead to a partial reversal of gains, compounded by significant tariffs. Despite a strong backlog and healthier dealer inventories, these factors create uncertainty. Consequently, while Caterpillar’s earnings power has improved, the valuation metrics suggest limited upside potential at the current trading levels, leading to a Hold recommendation.
According to TipRanks, Dillard is a 4-star analyst with an average return of 7.3% and a 57.28% success rate. Dillard covers the Industrials sector, focusing on stocks such as Quanta Services, Eaton, and Agco.
In another report released on May 4, D.A. Davidson also maintained a Hold rating on the stock with a $331.00 price target.