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Is this Large Market Cap Stock target price reasonable for Caterpillar Inc. (NYSE:CAT)?

The company in question is, Caterpillar Inc. (NYSE:CAT) currently with a stock price of 87.29 (-0.43% today). The market cap for Caterpillar Inc. is 50986.09, and is in the sector Industrial Goods, and Farm & Construction Machinery industry. The target price for Caterpillar Inc. is 76.56. Currently Caterpillar Inc. is trading with a P/E of 46.8, and a forward P/E of 24.47. Average volume for Caterpillar Inc. is 4312.43 and so far today it is 4452700.

Performance in the last year for Caterpillar Inc. has been 30.76%. For EPS growth, Caterpillar Inc. has seen a growth of -40.50%, and is looking to grow in the next year to 1.71%. More long term stats show that EPS growth has been -3.40% over the last five years and could be 5.47% for the next five years. Caterpillar Inc. has seen sales growth quarter over quarter at -16.00%, with EPS growth quarter over quarter at -28.80%. The 20-day simple moving average is 3.82%, with the 200-day simple moving average coming to 17.01%.

Since the IPO date for Caterpillar Inc. on the 1/2/1962, Caterpillar Inc. has seen performance year to date to be 32.58%. With Caterpillar Inc. trading at 87.29, the dividend yield is 3.53%, and the EPS is 1.87.

So could Caterpillar Inc., be undervalued? Well as said before P/E is 46.8. The PEG is 8.56, P/S is 1.22 and the P/B is at 3.35. The P/cash is 7.54, with P/free cash flow at 55.84.

Caterpillar Inc. ability to deal with debt shows that the current ratio is 1.2, and the quick ratio is 0.9. This is with long term debt/equity at 1.57, and total debt/equity at 2.52.

In terms of margins, Caterpillar Inc. has a gross margin of 27.30%, an operating margin of 4.50% and a profit margin of 2.60%.Payout ratio for Caterpillar Inc. is 163.60%. Return on assets come to 1.40% with return on investment coming to 4.80%.

Insider ownership for Caterpillar Inc., is at 0.10% and institutional ownership comes to 70.60%. Outstanding shares are at 584.1. While shares float is 582.45. The float short is currently 7.15%, and short ratio is 9.66.

Disclaimer: Remember there is a risk to your investment, this is not a recommendation, nor personal advice, never invest more than you are able too loose.

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Tony Dabbs

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