Barclays' analysts wrote in a note yesterday that the global construction equipment company could generate enough free cash flow to buy back 35 million shares in three years, adding up to $1.20 of earnings per share by 2016. Barclays' analysts also boosted their price target to $112 from $107, according to the Analyst Ratings Network.
The stock rose more than 2% today after climbing yesterday. Sentiment on the stock is 76% bullish, according to StockTwits' analytics.
$CAT is getting closer to intrinsic value @ $116. Some room left, but not much http://stks.co/r0Ad5 -- Eugene Art (@StoxValue) Apr. 2 at 02:32 PMSome cashtaggers said that the climb was overdone. It wasn't as though the company announced a new revenue source, they argued. And Caterpillar could decide it wants to do something else with its free cash besides repurchase shares.
$CAT buybacks, not fundamental changes, http://stks.co/q0APn -- Jimi Zen (@JimiZen) Apr. 2 at 01:41 PMCaterpillar management's testimony before congress this week tempered enthusiasm for a projected buyback. Caterpillar executives told a senate panel that the company pays its fair share of taxes, even if much of Caterpillar's profits go through a Swiss subsidiary with a much smaller negotiated tax rate than the prevailing U.S. corporate tax rate. The Senate committee responded by blasting the company for setting up a tax shelter.
$GM $CAT both down a bit #premarket even though broader market likely to open higher. Congressional hearings not good for shareholder value. -- Paul La Monica (@lamonicabuzz) Apr. 1 at 08:23 AMTaxes are a major issue for U.S. corporations. The United States will charge about 40% this year, according to data compiled by audit and tax advisory firm KPMG. Switzerland, for comparison's sake, has a tax rate of just under 18%. Places such as Ireland, Cyprus, Gibraltar, Lithuania, Latvia, Jordan and Kuwait have a rate under 15%. At the time of publication, the author held no positions in any of the stocks mentioned. This article represents the opinion of a contributor and not necessarily that of TheStreet or its editorial staff.