CAT Stock Tries to Shrug Off Earnings Miss, Asia Weakness

The firm also slashed its full-year profit guidance

Deputy Editor
Oct 23, 2019 at 9:42 AM
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The shares of Caterpillar Inc. (NYSE:CAT) are trying to gain this morning despite a disappointing third-quarter earnings report. The company missed on earnings and revenue, and CAT slashed its full-year profit guidance, due in part to weak demand in Asia. What's more, the company told investors in the earnings call that customers are "delaying capital spending" due to uncertainty around the global economy.

The stock is down 1.6% at $131.60 -- just one day after hitting a three-month high of $134.26 on the charts. In fact, since gapping higher earlier this month, the shares staged a hard rally off their 30-day moving average, which happens to coincide with the stock's year-to-date breakeven level -- a region that's acted as a springboard for the stock several times in the past year. 

It looks like most analysts have been cautious on the Dow component, with 12 of the 16 in coverage calling it a "hold" or worse. On top of this, the consensus 12-month price target of $139.35 is just a slim 4.2% premium to last night's close. 

Options traders have been quite bearish on the stock, too, with 1.15 puts bought for every call on the the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) in the last 10 days. This ratio sits higher than 93% of all other readings from the past year, too, suggesting a much healthier appetite for puts over calls of late. 

 


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