American Invest Hub
  • Politics
  • Investing
  • Business
  • Latest News

American Invest Hub

  • Politics
  • Investing
  • Business
  • Latest News
Investing

Caterpillar stock forecast 2025: A 25% crash can’t be ruled out

by admin December 26, 2024
December 26, 2024
Caterpillar stock forecast 2025: A 25% crash can’t be ruled out

Caterpillar’s stock price has moved into a technical correction after falling by 12% from its highest level this year. It fell to $367, and is hovering at its lowest level since September. Still, its stock has done well in the past few years, surging by over 365% from its lowest level during the pandemic.

Is CAT a good buy?

Caterpillar, the giant industrial giant, has done well in the past few years as governments have continued to boost their infrastructure spending. Its annual revenue rose from over $50 billion in 2019 to over $67 billion in 2023.

There are signs, however, that the company’s growth is slowing as some key countries like the United States, China, and in Europe slow down. It has also been affected by the rising competition from other industrial giants and supply chain challenges.

The company’s most recent results showed that revenue dropped by 4% in the third quarter. Operating profit declined by 9% to $3.1 billion, while adjusted profit and profit per share fell by 8% and 7%, respectively.

Caterpillar’s revenue dropped mainly due to weak performance in the construction industry. Volume in key regions like North America, Europe, and Asia also dropped. The division’s revenue dropped by 9%, while its profit fell by 20% to $361 million.

The construction sector may continue decelerating in 2025 if Donald Trump succeeds with his mass deportation pledge. In it, the president wants to deport millions of undocumented migrants, a move that will negatively impact the industry. 

The resource segment also continued deteriorating. Its sales dropped to $3 billion in the third quarter from $3.4 billion last year as key commodity prices dropped. Key commodities like coal, copper, and steel continued falling. Its segment profit dropped by 15% to $111 million.

These declines were offset by an improvement in the energy and, transportation, and financial products whose revenues rose to $7.2 billion and $1.03 billion, respectively. 

Valuation and dividends

Analysts expect the business to continue slowing in the next few years. In the last financial results, management estimated that sales would be lower than previous estimates. 

The average annual revenue estimate will be $64.60 billion, down by 3.68% from a year ago. Revenue is then expected to grow to $65.42 billion in the next financial year. 

The company has also become relatively undervalued as its forward price-to-earnings ratio moved to 17.3, lower than the sector median of 23. Its non-GAAP PE ratio of 16.8 is also lower than the sector median of 20.19.

Caterpillar is also a leading dividend payer, with a dividend payout ratio of 24.65% and a ratio of 1.53%. It is also a leading dividend aristocrat, having boosted its payouts in the last 31 years.

Caterpillar stock price analysis

CAT chart by TradingView

The daily chart shows that the CAT share price peaked at $418 in November and then fell sharply after its earnings, as we predicted. It has moved below the 50-day and 100-day Exponential Moving Averages (EMA).

The stock has formed an ascending channel and is now along its lower side. It has also moved slightly above the 23.6% Fibonacci Retracement level.

Therefore, the stock’s outlook is neutral with a bearish bias since it has formed a head and shoulders pattern. More downside will be confirmed if it crashes below the lower side of this channel. If that happens, the next level to watch will be the 50% retracement at $285, which is about 22% below the current level. 

The post Caterpillar stock forecast 2025: A 25% crash can’t be ruled out appeared first on Invezz

0
FacebookTwitterGoogle +Pinterest
previous post
USD/SGD forms golden cross: Is Singapore dollar about to crash?
next post
AMD stock price analysis: AI Winter and death cross in focus

Related Posts

Will Cardano, Solana, Tron, and altcoins go back...

February 25, 2025

EV charging stocks have plunged: here’s why EVgo...

February 19, 2025

Brent crude oil price forecast: 3 reasons it...

April 13, 2025

License Approvals Received from North-West Territories Regulator for...

February 25, 2024

Mullen Automotive stock has imploded: bankruptcy risk is...

October 15, 2024

Crypto price predictions: Bitcoin Cash, VeChain, Hedera, Monero

March 5, 2025

Hang Seng index forecast 2025: buy, sell, or...

December 23, 2024

Celestica stock gets a ‘Buy’ rating from Stifel:...

September 10, 2024

Could the Silver Price Really Hit US$100 per...

March 1, 2024

AMD stock price forecast: set to surge after...

February 27, 2025

    Stay updated with the latest news, exclusive offers, and special promotions. Sign up now and be the first to know! As a member, you'll receive curated content, insider tips, and invitations to exclusive events. Don't miss out on being part of something special.


    By opting in you agree to receive emails from us and our affiliates. Your information is secure and your privacy is protected.

    Latest News

    • Interview: Strategic location gives Brazil Potash cost advantage in domestic fertiliser market, says CEO Matt Simpson

      June 1, 2025
    • Canada’s Q1 GDP expands by 2.2%, driven by exports spike ahead of potential US tariffs

      June 1, 2025
    • President Trump to host farewell for Elon Musk as DOGE leader steps away

      June 1, 2025
    • UK’s digital banks face divergent fortunes: Starling stumbles, Monzo and Revolut soars

      June 1, 2025
    • Trump wants Apple to shift iPhone production from India to the US: here’s what it means

      May 18, 2025

    Categories

    • Business (3,022)
    • Investing (2,459)
    • Latest News (1,994)
    • Politics (1,530)
    • About us
    • Contact us
    • Privacy Policy
    • Terms & Conditions

    Disclaimer: americaninvesthub.com, its managers, its employees, and assigns (collectively “The Company”) do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

    Copyright © 2025 americaninvesthub.com | All Rights Reserved