NEW YORK (TheStreet) -- Shares of Caterpillar Inc. (CAT) are lower in pre-market trade as the manufacturer is facing no fewer than 15 lawsuits over allegations that engines for trucks, charter buses and school buses it sold between 2006 and 2010 were prone to regular breakdowns and in some cases caught fire, the Wall Street Journal reports.
Although the alleged flaws aren't known to have caused deaths or injuries, the suits are a potentially costly embarrassment for a company that regularly says the reliability of its products justifies premium prices, the Journal says.
TheStreet Ratings team rates CATERPILLAR INC as a Buy with a ratings score of B+. TheStreet Ratings Team has this to say about their recommendation:
"We rate CATERPILLAR INC (CAT) a BUY. This is driven by multiple strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, reasonable valuation levels, good cash flow from operations, solid stock price performance and growth in earnings per share. We feel these strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated."
Highlights from the analysis by TheStreet Ratings Team goes as follows: