Caterpillar Stock Valuation

CAT
 Stock
  

USD 236.13  0.44  0.19%   

What would the acquisition value of Caterpillar be today? Calculating the true value of any business is not as easy as it may seem. While the market cap of a public entity, such as Caterpillar, is its stock price multiplied by the total number of shares outstanding, calculating Caterpillar's enterprise value requires a different approach. It uses Caterpillar's balance sheet items such as long-term debt, the book value of the preferred stock, minority interest, and other important financials.
Free Cash Flow is likely to drop to about 5.8 B in 2022. Enterprise Value is likely to drop to about 132.2 B in 2022.
Caterpillar shows a prevailing Real Value of $247.42 per share. The current price of the firm is $236.13. At this time, the firm appears to be undervalued. Our model approximates the value of Caterpillar from analyzing the firm fundamentals such as Current Valuation of 153.06 B, return on equity of 0.46 %, and Profit Margin of 0.13 % as well as examining its technical indicators and Probability Of Bankruptcy. In general, we favor acquiring undervalued instruments and selling overvalued instruments since, at some point, asset prices and their ongoing real values will blend.
  
Caterpillar Valuation Module provides a unique way to ballpark how much the company is worth today. It is done using both, our quantitative analysis of the company fundamentals as well as its intrinsic market price estimation to project the real value. We also take into consideration other essential factors such as Caterpillar's management style, its c-level domain expertise and tenure, its overall leadership history as well as current capital structure, and future earnings potential.

Caterpillar Most Recent Valuation Data

Dividend Share
4.62
Beta
1.12
change Receivables
-1.3 B
Fiscal Year End
December
property Plant And Equipment Net
12.1 B
Enterprise Value
152.8 B
Undervalued
Today 236.13
Please note that Caterpillar's price fluctuation is very steady at this time. Calculation of the real value of Caterpillar is based on 3 months time horizon. Increasing Caterpillar's time horizon generally increases the accuracy of value calculation and significantly improves the predictive power of the methodology used.
Our valuation method for Caterpillar is useful when determining the fair value of the Caterpillar stock, which is usually determined by what a typical buyer is willing to pay for full or partial control of Caterpillar. Since Caterpillar is currently traded on the exchange, buyers and sellers on that exchange determine the market value of Caterpillar Stock. However, Caterpillar's intrinsic value may or may not be the same as its current market price, in which case there is an opportunity to profit from the mispricing, assuming the market price will eventually merge with its intrinsic value.
212.52
Downside
247.42
Real Value
249.60
Upside
Estimating the potential upside or downside of Caterpillar helps investors to forecast how Caterpillar stock's addition to their portfolios will impact the overall performance. We also use other valuation drivers to help us estimate the true value of Caterpillar more accurately as focusing exclusively on Caterpillar's fundamentals will not take into account other important factors:
Earnings
Estimates (12)
LowProjected EPSHigh
10.1010.3510.59
Details
Hype
Prediction
LowEstimated ValueHigh
235.15237.33239.51
Details
17 Analysts
Consensus
LowTarget PriceHigh
164.00237.57270.00
Details
Traditionally analysts and sophisticated investors use multiple methods for valuing a cash-flow-generating entity or its stock. For example, some money managers use Caterpillar's intrinsic value based on its ongoing forecasts of Caterpillar's financial statements. In contrast, other private, professional wealth advisors use a multiplier approach by looking to relative value analysis against Caterpillar's closest peers. When choosing an evaluation method for Caterpillar, ensure it is appropriate for the firm given its current financial situation and market classification. If more than one evaluation category is relevant, we suggest using both methods to arrive at a better estimate.

Caterpillar Investments

290.74 Million

Caterpillar Valuation Drivers Correlation

Many accounts on the financial statements of Caterpillar are highly interrelated and sometimes correlated. Consequently, when conducting Caterpillar's valuation analysis, one should examine all of the accounts reported to obtain a complete picture of its financial situation. We provide a unique feature to present a conventional correlation table purposely composed against different valuation-related drivers of Caterpillar
Click cells to compare fundamentals

Caterpillar Valuation Trend

Knowing Caterpillar's actual value is paramount for traders to make sound investment determinations. Caterpillar's real value is not only important for the investor to make better decisions but also for a more accurate overall view of Caterpillar's financial worth over time since having this information enables investors and analysts to forecast the earnings more efficiently. Using both Caterpillar's enterprise value as well as its market capitalization is the best way to gauging the value of the company and is usually enough for investors to make market timing descisions.

Caterpillar Market Cap

Caterpillar is number one stock in market capitalization category among related companies. Market capitalization of Industrials industry is currently estimated at about 148.8 Billion. Caterpillar totals roughly 122.88 Billion in market capitalization claiming about 83% of equities under Industrials industry.
Capitalization  Workforce  Revenue  Total debt  Valuation

Caterpillar Valuation Ratios as Compared to Competition

Comparative valuation techniques use various fundamental indicators to help in determining Caterpillar's current stock value. Our valuation model uses many indicators to compare Caterpillar value to that of its competitors to determine the firm's financial worth. You can analyze the relationship between different fundamental ratios across Caterpillar competition to find correlations between indicators driving Caterpillar's intrinsic value. More Info.
Caterpillar is number one stock in last dividend paid category among related companies. It is number one stock in five year return category among related companies reporting about  0.52  of Five Year Return per Last Dividend Paid. The ratio of Last Dividend Paid to Five Year Return for Caterpillar is roughly  1.91 . Comparative valuation analysis is a catch-all model that can be used if you cannot value Caterpillar by discounting back its dividends or cash flows. This model doesn't attempt to find an intrinsic value for Caterpillar's Stock . Still, instead, it compares the stock's price multiples to a benchmark or nearest competition to determine if the stock is relatively undervalued or overvalued. The reason why the comparable model can be used in almost all circumstances is due to the vast number of multiples that can be utilized, such as the price-to-earnings (P/E), price-to-book (P/B), price-to-sales (P/S), price-to-cash flow (P/CF), and many others. The P/E ratio is the most commonly used of these ratios because it focuses on the Caterpillar's earnings, one of the primary drivers of an investment's value.
Please note that valuation analysis is one of the essential comprehensive assessments in business. It evaluates Caterpillar's worth, which you can determine by considering its current assets, liabilities and future cash flows. The investors' valuation analysis is an important metric that will give you a perspective on different companies. It helps you know the worth of the potential investment in Caterpillar and how it compares across the competition.

About Caterpillar Valuation

The stock valuation mechanism determines the current worth of Caterpillar on a weekly basis. We use both absolute as well as relative valuation methodologies to arrive at the intrinsic value of Caterpillar. In general, an absolute valuation paradigm, as applied to this company, attempts to find the value of Caterpillar based exclusively on its fundamental and basic technical indicators. By analyzing Caterpillar's financials, quarterly and monthly indicators, and its related drivers such as dividends, operating cash flow, and various types of growth rates, we attempt to find the most accurate representation of Caterpillar's intrinsic value. In some cases, mostly for established, large-cap companies, we also incorporate more traditional valuation methods such as dividend discount, discounted cash flow, or asset-based models. As compared to an absolute model, our relative valuation model uses a comparative analysis of Caterpillar. We calculate exposure to Caterpillar's market risk, different technical and fundamental indicators, relevant financial multiples and ratios, and then comparing them to Caterpillar's related companies.
Fiscal Year End
December
Industry
Farm & Heavy Construction Machinery
Concentration
Construction Machinery & Heavy Trucks
Full Time Employees
107.7 K
Service Category
Machinery
Employer Id Number
37-0602744
Last ReportedProjected for 2022
Gross Profit15 B14 B
Profit Margin 12.73  13.74 
Caterpillar's stock price is the clearest measure of market expectations about its performance. Without stock valuation, investors cannot independently discern whether Caterpillar's value is low or high relative to the company's performance and growth projections. Determining the market value of Caterpillar can be done in different ways, such as multiplying its stock price by its outstanding shares.
A single share of Caterpillar represents a small ownership stake in the entity. As a stockholder of Caterpillar, your percentage of company ownership is determined by dividing the number of shares you own by the total number of shares outstanding and then multiplying that amount by 100. Owning stock in a company generally confers both corporate voting rights and income from any dividends paid to the stock owner.

Caterpillar Dividends Analysis For Valuation

Dividend Yield is likely to gain to 0.0221 in 2022, whereas Payment of Dividends and Other Cash Distributions is likely to drop (2.5 B) in 2022. . Caterpillar Earnings per Basic Share are comparatively stable at the moment as compared to the past year. Caterpillar reported Earnings per Basic Share of 11.93 in 2021. Earnings per Diluted Share is likely to gain to 12.76 in 2022, whereas Earnings Before Interest Taxes and Depreciation Amortization EBITDA are likely to drop slightly above 9.6 B in 2022.
Last ReportedProjected for 2022
Payment of Dividends and Other Cash Distributions-2.3 B-2.5 B
Dividend Yield 0.021  0.0221 
Dividends per Basic Common Share 4.28  4.00 
There are various types of dividends Caterpillar can pay to its shareholders, and the actual value of the dividend is determined on a per-share basis. It is to be paid equally to all of Caterpillar shareholders on a specific date, known as the payable date. The cash dividend is the most common type of dividend payment - it is the payment of actual cash from Caterpillar directly to its shareholders. There are other types of dividends that companies can issue, such as stock dividends or asset dividends. When Caterpillar pays a dividend, it has no impact on its enterprise value. It does, however, lowers the Equity Value of Caterpillar by the value of the dividends paid out.

Caterpillar Valuation Growth Rates

Growth stocks usually refer to those companies expected to grow sales and earnings faster than the market average. Growth stocks typically don't pay dividends, often look expensive, and usually trading at a high P/E ratio. Nevertheless, such valuations could be relatively cheap if the company continues to grow, which will drive the share price up. However, since most investors are paying a high price for a growth stock, based on expectations, if those expectations are not fully realized, growth stocks can see dramatic declines. Note, investing in growth stocks can be very risky. If the company such as Caterpillar does not do well, investors take a loss on the stock when it is time to sell. Also, because growth stocks typically do not pay dividends, the only opportunity an investor has to make money on their investment is when they eventually sell their shares.
Quarterly Earnings Growth Y O Y0.488

Caterpillar Current Valuation Indicators

Valuation refers to the process of determining the present value of Caterpillar and all of its assets. It can be calculated using a number of techniques. As many analysts who try to value Caterpillar we look at many different elements of the entity such as Caterpillar's management, its prospective future earnings, the current market value of the company's assets, as well as its capital structure formation. Caterpillar's valuation analysis is also a process of estimating the intrinsic value of all assets and outstanding equities. There are different methodologies and models we use to develop the final Caterpillar's valuation. The techniques such as discounted cash flow and fundamental indicators such as book value per share or market capitalization are well known and widely used across most financial advisers and money managers.
Valuations are an essential part of business, for companies themselves, but also for investors. For companies, such as Caterpillar, valuations can help measure their progress and success and can help them track their performance in the market compared to others. In addition, investors can use Caterpillar's valuations to help determine the worth of potential investments. They can do this by using data and information made public by a company. Regardless of who the valuation is for, it essentially describes Caterpillar's worth.
Continue to Trending Equities. Note that the Caterpillar information on this page should be used as a complementary analysis to other Caterpillar's statistical models used to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.

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When running Caterpillar price analysis, check to measure Caterpillar's market volatility, profitability, liquidity, solvency, efficiency, growth potential, financial leverage, and other vital indicators. We have many different tools that can be utilized to determine how healthy Caterpillar is operating at the current time. Most of Caterpillar's value examination focuses on studying past and present price action to predict the probability of Caterpillar's future price movements. You can analyze the entity against its peers and financial market as a whole to determine factors that move Caterpillar's price. Additionally, you may evaluate how the addition of Caterpillar to your portfolios can decrease your overall portfolio volatility.
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Is Caterpillar's industry expected to grow? Or is there an opportunity to expand the business' product line in the future? Factors like these will boost the valuation of Caterpillar. If investors know Caterpillar will grow in the future, the company's valuation will be higher. The financial industry is built on trying to define current growth potential and future valuation accurately. All the valuation information about Caterpillar listed above have to be considered, but the key to understanding future value is determining which factors weigh more heavily than others.
Quarterly Earnings Growth YOY
0.49
Market Capitalization
122.9 B
Quarterly Revenue Growth YOY
0.21
Return On Assets
0.0695
Return On Equity
45.48
The market value of Caterpillar is measured differently than its book value, which is the value of Caterpillar that is recorded on the company's balance sheet. Investors also form their own opinion of Caterpillar's value that differs from its market value or its book value, called intrinsic value, which is Caterpillar's true underlying value. Investors use various methods to calculate intrinsic value and buy a stock when its market value falls below its intrinsic value. Because Caterpillar's market value can be influenced by many factors that don't directly affect Caterpillar's underlying business (such as a pandemic or basic market pessimism), market value can vary widely from intrinsic value.
Please note, there is a significant difference between Caterpillar's value and its price as these two are different measures arrived at by different means. Investors typically determine Caterpillar value by looking at such factors as earnings, sales, fundamental and technical indicators, competition as well as analyst projections. However, Caterpillar's price is the amount at which it trades on the open market and represents the number that a seller and buyer find agreeable to each party.