Jim Cramer Weighs In On Caterpillar Stock Following Analyst Upgrade

Caterpillar Inc CAT is trading higher Wednesday following positive analyst coverage from Bernstein. 

What Happened: Bernstein analyst Chad Dillard upgraded Caterpillar from Market Perform to Outperform and announced a $240 price target.

Dillard cited overdone machinery cycle concerns as a reason for the upgrade. As a result, he believes expectations are too low. The Bernstein analyst also expects Caterpillar to be one of the biggest beneficiaries of easing monetary policy in China.

Cramer's Take: "I thought this call was really good," Jim Cramer said Wednesday on CNBC's "Squawk On The Street."

Cramer said the company has fantastic management. "This guy Jim Umpleby who runs it, he's terrific," he said. 

Umpleby has been the CEO of Caterpillar since 2017. He was the vice president of Caterpillar and president of Solar Turbines, a Caterpillar subsidiary, from 2010 to 2017.

Under new management, the company is no longer acting "reckless," rather it's focused on returning capital, according to Cramer. 

"It's really well run. I think it's great," Cramer said. "It's too cheap."

From Last Week: Price To Earnings Ratio Insights For Caterpillar

CAT Price Action: Caterpillar has traded as high as $246.69 and as low as $175.11 over a 52-week period.

The stock was up 1.61% at $201.55 late Wednesday morning.

Photo: courtesy of Caterpillar.