Caterpillar stock: buy or sell
Updated on:
Mar 7th, 2021
2
Caterpillar stock brief
- Caterpillar closed on Friday at $220.16 after exploding a 3.47% and broke a streak of 3 sessions in red.
- Daiwa Capital Markets posted a hold rating for Caterpillar on Friday
- Caterpillar Inc. manufactures and sells construction and mining equipment, diesel and natural gas engines, industrial gas turbines, and diesel-electric locomotives worldwide.
Should I buy Caterpillar stock?
All successful traders recommend adhering to a trading strategy and not make decisions based on subjective opinions, rumors or feelings. Trading strategies are meant for helping you in the decision process of what stocks to pick and when is the best moment to buy them. At Stocks2.com, we like to use very simple but trusted and powerful trend following trading strategies. Simple things usually work the best
Is $CAT stock a buy?
Currently, Caterpillar stock matches one trading strategy:
ATH buy setup
All-time Highs is always an excellent buy point for those who like to buy high and sell higher. The good point of buying at ATHs is that shares price doesn't struggle with upper resistances, and usually it scales fast. However, you must always be aware of a possible bulls trap that may trigger your buy order and then falls sharply. That's why a stop loss is always important. Caterpillar can break to all-time highs any time soon, as it only needs to go up a 2.96%. Setup your buy order at $226.67 if you want to trade with this strategy. Arm your stop-loss at $204.00
| Buy setup | Buy point | Stop loss | Risk |
| ATH buy setup | $226.67 | $204.00 | 10.00% |
Should I sell Caterpillar stock?
Knowing when to sell a stock is even more difficult than knowing when to buy it. Similarly to when we have to buy shares, determining when is appropiate time to sell is not a haphazard decision, and we must use our own trading strategy. We like very simple strategies to guide us on when is the best moment to sell our shares. Be aware that these strategies are not intended for shorting $CAT stock
As a rule of thumb, you must never keep an investment that generates losses greater than those expected at the time of purchase. The timing to sell your stock should always be determined by the stop-loss (automatic or manual)
Is it time to sell Caterpillar stock?
In the current situation of Caterpillar there is not any eligible sell setup, so Caterpillar stock holders with operations in profit can keep their positions
Caterpillar ratings
In the last month, 3 brokerage ratings were published for Caterpillar. General sentiment is bullish, with 2 out of 3 publishing positive outlooks
| Brokerage firm | Rating |
|---|---|
| Feb 25th, 2021 | |
| JPMorgan Chase & Co. | Buy |
| Mar 3rd, 2021 | |
| JPMorgan Chase & Co. | Buy |
| Mar 5th, 2021 | |
| Daiwa Capital Markets | Buy → Neutral |
Caterpillar stock analysis
Since in May 2020, Caterpillar has been drawing an uptrend that so far marked an amazing 123.85%. During this uptrend, the price provided some entry points on the breakouts. Latest pullback was last January, when price bounced at $179.34. Caterpillar broke out above $199.11 (its last top) in mid-February. That breakout was a good entry point that resulted in a 10.57% profit
SMAs overview
Supports and resistances
Price is at highs and there are not upper resistances.
The current supports are:
Bollinger bands
Since the price surpassed the upper band on February 25, the price corrected downwards by 1.89%
Relative strength index
The RSI dropped below the overbought level of 70 last Tuesday after just crossing to the overbough zone for a single day (weak signal). The RSI reading on Friday was 66.58. Caterpillar price merely moved a 0.18% since then
Caterpillar stock price history
Caterpillar started trading on Jan 2nd, 1962 at $0.51 per share1. Since then, CAT stock has risen by 43,068.63%, with an average of 729.98% per year. If you had invested thousand dollars in Caterpillar stock on Jan 1962, it would worth $431,686.27 today.
1: Adjusted price after possible price splits or reverse-splits
Price target for Caterpillar stock
How much a stock will be priced tomorrow or next week is quite unpredictable. However, many stock price predictions are posted every day by banks, financial institutions and independent analysts.
The following table shows the price forecasts released by brokerage institutions over the last 30 days. Again, these targets are not direct recommendations for individual investors and should not be trusted blindly.
There are 2 price forecasts posted for Caterpillar that average $237.00. That is a 7.65% than the current price ($220.16).
| Brokerage firm | Price target |
|---|---|
| Feb 25th, 2021 | |
| JPMorgan Chase & Co. | $205.00 → $237.00 |
| Mar 3rd, 2021 | |
| JPMorgan Chase & Co. | $205.00 → $237.00 |
| Mar 5th, 2021 | |
| Daiwa Capital Markets | Not available |
Earnings and financials
Last January, Caterpillar Inc. ($CAT) reported adjusted EPS for that highly beat analysts' expectations. Quarterly EPS was $2.12 per share vs the estimates of $1.49. This Q4 report means an earnings surprise of 42.28%. On the contrary, the company reported turnover for this quarter was $11.2 billion in line with analysts' estimates.
Compared to the same quarter last year, EPS was $2.63, so current EPS means a decrease of -19.39%. Looking at revenue, figures tanked a -14.52% compared to $131.4B year over year.Caterpillar ($CAT) presents financial report late next April. Expected for this quarter is $1.88, compared to $2.12 that was reported for Q4.
Caterpillar performance
| Company | 1m | 3m | 6m |
|---|---|---|---|
| Caterpillar ($CAT) | 14.70% | 27.30% | 49.90% |
Please read:
The viewpoints published in this post are personal and should not be followed as recommendations for you to buy or sell stocks. The author of this paper does not have any knowledge of the specific circumstances of the reader, his or her financial statements or what is in his or her best interest at any given time. All users should speak with their financial advisor before buying or selling any securities Thoughts are expressed for educative reasons onlyCaterpillar summary
| Friday, March 5th, 2021 | |
|---|---|
| Open | $214.34 |
| Close | $220.16 |
| Day range | $211.5 - $220.78 |
| Previous close | $212.77 |
| Session gain | 3.47% |
| Average true range | $7.61 |
| 50d mov avg | $195.38 |
| 100d mov avg | $182.31 |
| 200d mov avg | $158.47 |
| Earnings date | April 27th, 2021 |