Quarter: Caterpillar swung to a first-quarter profit of $233 million, or 36 cents, from a loss of $112 million, or 19 cents, a year earlier. The operating margin fell from 16% to 12%. Cat has $30 billion of debt, converting to a debt-to-equity ratio of 3.4.
Stock: Caterpillar has doubled during the past 12 months, beating U.S. benchmarks. It sells for a price-to-cash-flow ratio of 6.9, a 58% discount to the machinery industry average. Its PEG ratio of 0.3 reflects a 70% discount to estimated fair value.
Consensus: Of researchers following Caterpillar, 13, or 50%, advocate purchasing its shares, 11 advise holding and two say to sell them. RBC (RY) offers a target of $86, leaving a potential return of 22%. Avondale Partners offers a target of $85.