September 10, 2018

CAT – Market expectations are for continued Uniform ROA recovery, and management is confident about revenues, profitability, and shareholder returns


  • Caterpillar Inc. (CAT:USA)¬†currently trades at recent lows relative to UAFRS-based (Uniform) Earnings, with a 19.7x Uniform P/E. Even at these levels, the market has bullish expectations for the firm, and management is confident about top-line growth, profitability and shareholder returns
  • Specifically, management is confident in their ability to sustain growth in sales and revenue, particularly in the cruise sector. Moreover, they are confident in their ability to continue delivering on the commitments they made at their Investor Day last September, maintaining high profit per share and returning capital to shareholders. Additionally, they are confident in their ability to sustain high operating margins, and about the sustainability of strong aftermarket mining orders. Finally, they are confident about the sustainability of sales growth in the Asia-Pacific region, driven by continued investment in building construction and infrastructure
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