Caterpillar Stock Inches Higher After Upgrade

Options traders continue to lean bullish

Deputy Editor
Dec 22, 2021 at 10:51 AM
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The shares of Caterpillar Inc (NYSE:CAT) are up 1.8% to trade at $201.99 at last check, after Bernstein upgraded the blue-chip construction name to "outperform" from "market perform," with a price-target hike to $240 from $200. The firm noted continued supply chain issues, but expects CAT to be the "biggest beneficiary of an easing monetary policy in China," and benefit from lower steel costs.

Today's pop has CAT back above the 60- and 80-day moving averages, as well as the $200 level -- a familiar line of support since July. Still, pressure at the $208 level lingers above, as well as the 160-day moving average, which kept a cap on gains in early November. 

Analysts are split on Caterpillar stock. Of the 29 in coverage, 14 carry a "buy" or better rating, and 15 a "hold" or worse. Meanwhile, the 12-month consensus price target of $226.54 is a 12.3% premium to current levels. 

Elsewhere, options traders have been more optimistic than they have been all year. This is per CAT's 50-day call/put volume ratio of 2.52 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), which stands higher than all other readings in its annual range. 

Options bulls are showing no sign of slowing down today, either, with call volume running at three times its intraday average. More specifically, 9,831 calls have crossed the tape, in comparison to 2,416 puts. The weekly 12/31 205-strike call is the most popular, followed by the weekly 12/23 205-strike call, with new positions being opened at both. 


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