CAT Brushes Off Downgrade, Drop in Sales

The company's global machines retail sales dropped 23% on a three-month rolling basis in May

Deputy Editor
Jun 12, 2020 at 10:38 AM
facebook twitter linkedin


The shares of Caterpillar Inc. (NYSE:CAT) are up 2.8% at $124.95 at last check, despite receiving a downgrade from BMO to "market perform" from "outperform." The analyst in coverage expects a challenging recovery for CAT due to customers' financial constraints. Furthermore, CAT announced that global machines retail sales were down 23% on a three-month rolling basis in May, more specifically, down 36% in North America. 

With yesterday's 8.2% slide captured by the 20-day moving average, CAT is now hovering below the $125 mark -- a level serving as both support and resistance during the past year of trading. So far in 2020, the stock has shed 15.4%.

Analysts are bearish on Caterpillar, with 11 out of 15 sporting a "hold" or worse  rating, and only four carrying a "strong buy." Meanwhile, the 12-month consensus price target of $126.47 is just a chip-shot away from current levels. 

Meanwhile, short interest is falling off, down 10.71% during the last reporting period. These 8.25 million shares sold short now account for 1.53% of CAT's available float, or would take a day and a half to cover at the stock's average pace of trading. 

Also worth noting, CAT's Schaeffer's Volatility Scorecard (SVS) sits at a relatively high 84 out of 100, meaning Caterpillar stock has tended to exceed options traders' volatility expectations during the past year.

 

If you are not making money with options, you aren’t buying options like this…

There is no options strategy that more perfectly approaches trading the fastest moving and most volatile stocks available in the marketplace than this one. In fact, there is no strategy that better utilizes put options for optimal returns and a real trading edge over other traders in the exact same market. New options traders fail out at an incredible rate without proper trade research, execution timing, and option picking. Capitalize on Schaeffer’s 100+ years of options trading excellence with the most coveted product launch in company history. Don't waste another second... join us right now before the next round of trades are released!

 


 


 
Special Offers from Schaeffer's Trading Partners