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Analysis summary4-Traders Strategies 

Caterpillar Inc. : Buy on the lower bound

05/02/2012 | 10:36am
Opinion : Bullish above USD 99.7
Target price : USD 109.2
Stop loss: USD 96
Heavy Machinery & Vehicles

The world’s leading producer of mining construction and operation equipment, Caterpillar, has released for the first quarter a revenue of $16 billion, up 23% and a net income of $1.6 billion, up 29%.

Moreover, the group has revised upwards its forecast for annual profit to $9.50 per share, against $9.25 previously. It kept its forecast for sales, between $68 and $70 billion. The order book continued to increase in the first quarter at $ 30.7 billion. Besides, the management announced to face a slowdown in China and Brazil which curb their expansion to master inflation.

Technically, Caterpillar’s stock has failed to sustain bullish impetus. The share has declined and evolve now in a trading range bounded by USD 99.7/109.2. Currently, the security is near the lower bound, represented by the USD 99.7 mid-term support, and could head back towards the upper bound i nthe next sessions.

Thus, investors could take a buy position on the lower bound to target the upper bound at USD 109.2. A stop-loss will be fixed at USD 95.5, below a small gap at USD 96.

Caterpillar Inc. : Caterpillar Inc. : Buy on the lower bound

© 2012

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Financial Ratios

Size 2015e 2016e
Capitalization 48 293 M$ -
Entreprise Value (EV) 68 670 M$ 71 452 M$
Valuation 2015e 2016e
PER (Price / EPS) 16,5x 15,0x
Capitalization / Revenue 0,97x 0,97x
EV / Revenue 1,37x 1,44x
EV / EBITDA 9,95x 10,1x
Yield (DPS / Price) 3,34% 3,54%
Price to book (Price / BVPS) 2,28x 2,18x
Profitability 2015e 2016e
Operating Margin (EBIT / Sales) 8,31% 8,51%
operating Leverage (Delta EBIT / Delta Sales) -2,95x -
Net Margin (Net Profit / Revenue) 6,03% 6,47%
ROA (Net Profit / Asset) 4,67% 4,76%
ROE (Net Profit / Equities) 15,1% 14,9%
Rate of Dividend 55,1% 53,0%
Balance Sheet Analysis 2015e 2016e
CAPEX / Sales   3,66% 4,15%
Cash Flow / Sales (Taux d'autofinancement) 12,3% 11,8%
Capital Intensity (Assets / Sales) 1,29x 1,36x
Financial Leverage (Net Debt / EBITDA) 2,95x 3,26x
Income Statement Evolution
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EPS Revisions
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