Why Caterpillar (CAT) Stock Is Declining Today

NEW YORK (TheStreet) -- Caterpillar (CAT) shares are down -0.93% to $109.04 on Wednesday after disclosing that total retail sales from April - June fell 10%. Retail machine sales during the March - May period were down 12%.

Retail machine sales were down 30% in Asia, down 21% in Europe and the Middle East and down 18% in Latin America. North American sales were up 14%.

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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, solid stock price performance, reasonable valuation levels, good cash flow from operations and increase in net income. 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:

  • CAT's revenue growth has slightly outpaced the industry average of 6.2%. Since the same quarter one year prior, revenues slightly increased by 0.2%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • Investors have apparently begun to recognize positive factors similar to those we have mentioned in this report, including earnings growth. This has helped drive up the company's shares by a sharp 25.84% over the past year, a rise that has exceeded that of the S&P 500 Index. Regarding the stock's future course, although almost any stock can fall in a broad market decline, CAT should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
  • The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and the Machinery industry average. The net income increased by 4.8% when compared to the same quarter one year prior, going from $880.00 million to $922.00 million.
  • Net operating cash flow has increased to $1,897.00 million or 33.21% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -2.92%.
  • You can view the full analysis from the report here: CAT Ratings Report
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