- Analyst maintains Buy rating with a $388 PT despite CAT's revenue and adjusted EPS missing consensus.
- Strong order growth of 20% and tariff headwinds of 200-300 bps before mitigation were noted.
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Goldman Sachs analyst Jerry Revich expressed views on Caterpillar Inc. CAT first-quarter earnings reported on Wednesday.
The analyst maintained a Buy rating with a price target of $388.
The company reported a 9.8% year-over-year decline in sales and revenue to $14.25 billion, missing the consensus of $14.66 billion.
Adjusted EPS of $4.24 came below the consensus of $4.35.
Caterpillar expects tariffs to create an additional cost headwind of $250 million to $350 million in the second quarter, net of initial mitigation actions and cost controls
The analyst notes that the company reported a solid performance, with a 2% earnings beat versus Goldman Sachs’ estimates and a moderate 200-300 basis point headwind from tariffs, before mitigation.
Also, the company saw a strong order growth of 20% resulting in a 1.37x book-to-bill ratio, and a $400 million dealer inventory destock on a seasonally adjusted basis, adds the analyst.
The analyst estimates EPS of $19.26 in 2025, $21.27 in 2026 and $23.04 in 2027.
Investors can gain exposure to the stock via Amplify CWP Enhanced Dividend Income ETF DIVO and Global X Funds Global X Dow 30 Covered Call ETF DJIA.
Price Action: CAT shares are down 1.2% at $303.21 at the last check Wednesday.
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