Construction and mining equipment manufacturer Caterpillar Inc CAT is set to report its fourth-quarter earnings on Tuesday before the opening bell, kicking off the earnings season for construction stocks, here’s what investors can expect.
Earnings Outlook: The Street is estimating that Caterpillar will report earnings per share (EPS) of $4.02 on revenues of $16.1 billion.
Investors anticipate an increase in end-user demand for equipment and aftermarket components, production levels, and positive price realization in Caterpillar's "Resource Industries" business, which serves customers employing machinery in mining, quarry, waste, and material handling applications.
BofA analysts recently upgraded the stock from a Neutral to a Buy rating and raised its price target from $217 to $295.
The segment's top line is also anticipated to increase as heavy construction, quarries, and aggregates perform better.
Investors look to Caterpillar’s earnings as an indicator of the state of the national and global economy.
According to the Federal Reserve, total industrial production increased at an annual pace of 1.7% in the fourth quarter of 2022, while the mining index increased at an annual rate of 0.7%.
Last quarter, Caterpillar reported sales and revenue growth of 21% year-over-year to $14.99 billion, beating the Street consensus of $14.85 billion.
It issued an EPS of $3.95, above the Street consensus of $3.27.
Its Resource Industries segment produced $3.09 billion in revenues, representing 30% growth year-over-year.
Price Action: Shares of Caterpillar are trading 1.09% lower to $261.66, according to data from Benzinga Pro.
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