Credit Suisse Lowers Price Target for Caterpillar (CAT)

Credit Suisse Lowers Price Target for Caterpillar (CAT)


Credit Suisse has lowered their price target for construction equipment manufacturer, Caterpillar Inc.(CAT) on Tuesday.

The firm reaffirmed their “Outperform” rating for CAT, but lowered their price target from $117 to $108. This new price target suggests a 22% increase over the stock’s current price of $83.74, and 16% increase over the stock’s YTD price of $90.60.

An analyst from the firm commented, “CAT’s stock held up yesterday on low expectations despite lowering 2012 EPS and providing its first take on 2013, calling for a “flattish” sales year. However, CAT continues to execute, address its inventory issue and, more importantly, maintains its positive view on global growth over the long term, implying 2013 is just a mid-cycle pause. … Despite investor concerns, mining does not appear to be falling apart, noting there haven’t been more material cancellations and calling for 2013 mining capex to be down ~5-10%. We lower our 2012-2015 est.’s to $9.25 (from $9.60), $8.65 (from $10.50), $9.90 (from $11.20) and $11.90.”

Caterpillar shares were down $1.40, or -1.65% on Tuesday afternoon.

The Bottom Line
Shares of Caterpillar (CAT) have a 2.44% dividend yield, based on last night’s closing stock price of $85.08. The stock has technical support in the $79-$80 price area. If the shares can firm up, we see overhead resistance around the $88-$90 price levels.

Caterpillar Inc.(CAT) is not recommended at this time, holding a DARS™ Rating of 3.3 out of 5 stars.

Be sure to visit our complete recommended list of the Best Dividend Stocks, as well as a detailed explanation of our ratings system here.