CAT Stock Up After Ex-Boeing CEO Resigns from Board

The blue chip is expected to post its fourth-quarter earnings this Friday

Deputy Editor
Jan 28, 2020 at 9:40 AM
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Dow component Caterpillar Inc. (NYSE:CAT) is getting a boost just ahead of the company's fourth-quarter earnings report, due out before the open this Friday, Jan. 31. CAT stock is up 0.2% to trade at $136.05, following news former Boeing (BA) CEO Dennis Muilenburg will step down from Caterpillar's board, effective immediately. Muilenburg's resignation comes right on the heels of his firing from drama-ridden Boeing amid escalating troubles for the firm following two fatal 737 MAX crashes.

CAT has been consolidating just south of its all-time highs near the $148 region for the better part of January before selling off sharply this past week, along with the broader market. The stock just breached its 100-day moving average for the first time since October, and is still looking up at the region today. In the past 12 months, however, the blue chip is up nearly 10%. 

Looking at the past two years of post-earnings moves for Caterpillar, the stock has tended to swing lower, including a 9.1% next-day drop this time last year. The security has averaged a 4.3% swing the session after its last eight reports, regardless of direction, which is slightly lower than the 7.2% move the options pits are pricing in this time around. 

Elsewhere, sentiment among the brokerage bunch has been tepid. Eleven of those in coverage consider CAT a "hold" or worse, while only four say it's a "strong buy." On the other hand, the consensus 12-month price target of $149.91 is just shy of the construction concern's annual high from earlier this month, and sits at a 10.5% premium to last night's close. 

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