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Caterpillar Shares Decline Premarket Ahead of Q3 Earnings and Regulatory Inquiry

BearishMedium impact
CAT$754.37 −2.38%TRUI$24.13 −0.27%

Caterpillar Inc. (NYSE:CAT) shares moved lower in Wednesday trading as investors weighed recent price forecast reductions from Wall Street analysts, an elevated valuation, and government regulatory scrutiny ahead of the company's upcoming quarterly report.

Multiple brokerages recently trimmed their price targets for the heavy equipment manufacturer, even while keeping buy recommendations. The target adjustments come as the stock trades at a price-to-earnings ratio of roughly 33.3x, raising expectations for its third-quarter report on Oct. 28. Wall Street projects earnings per share of $6.19 on revenue of $19.13 billion, compared to $4.95 per share on $17.64 billion in revenue last year. Meanwhile, a joint federal inquiry into competition in agricultural equipment markets has introduced regulatory uncertainty.

Traders are watching whether upcoming earnings and guidance can support the stock's valuation. Technical indicators show key price support around $754.50 and resistance near $828. Caterpillar Inc. also maintains significant weighting in major exchange-traded funds, including the SPDR Dow Jones Industrial Average ETF Trust (NYSE:DIA) and the VanEck Industrials TruSector ETF (NASDAQ:TRUI), exposing shares to broader sector fund flows.

Key points

  • Caterpillar Inc. stock traded lower on Wednesday ahead of its third-quarter earnings report on Oct. 28.
  • Analysts expect third-quarter earnings per share of $6.19 on revenue of $19.13 billion.
  • Multiple Wall Street firms trimmed their price forecasts for the stock while maintaining buy ratings.
  • Federal agencies opened an inquiry into competition within agricultural equipment manufacturing and distribution.
  • Shares are trading below key moving averages, with support identified near $754.50 and resistance around $828.

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Questions and answers

Why is Caterpillar stock down?

Caterpillar Inc. stock declined due to recent price target cuts from analysts, a high price-to-earnings valuation of about 33.3x, and a federal regulatory inquiry into competition in agricultural equipment markets ahead of its quarterly earnings release.

When does Caterpillar report Q3 earnings?

Caterpillar Inc. is scheduled to report its third-quarter earnings on Oct. 28. Analysts project earnings per share of $6.19 on revenue of $19.13 billion, compared to $4.95 per share on $17.64 billion in revenue a year earlier.

What are analysts saying about Caterpillar stock?

Wall Street maintains a Buy consensus rating with an average price target of $988.86. However, firms including Citigroup and Truist Securities recently lowered their individual price targets to $950 and $1,100, respectively.