Caterpillar’s six-year agreement with the United Auto Workers expires March 1, and around 7,000 workers will vote on a strike authorization on Friday. Last week, a nine-month strike against another farm equipment maker, CNH, ended. A strike against Deere lasted five weeks in 2021 before ending in a six-year agreement.
Of 29 brokerages covering the shares, 14 have a Hold rating and 13 have Buy or Strong Buy ratings. At a recent share price of around $262.00, the stock has outrun its median price target of $250.00. At the high target of $337.00, the upside potential is 28.6%.
Caterpillar is expected to report fourth-quarter revenue of $15.84 billion, which would be up 5.6% sequentially and 14.8% higher year over year. Adjusted EPS are forecast at $4.03, up 1.9% sequentially and by nearly 50% year over year. For the full 2022 fiscal year, analysts are expecting EPS of $13.92, up 28.8%, on revenue of $58.55 billion, up 14.9%.
Caterpillar stock trades at about 18.8 times expected 2022 EPS, 17.2 times estimated 2023 earnings of $15.24 and 15.7 times estimated 2024 earnings of $16.70. The stock’s 52-week range is $160.60 to $262.26. Caterpillar pays an annual dividend of $4.80 (yield of 1.8%). Total shareholder return for the past 12 months was 25.2%.
Exxon Mobil
Shares of Exxon Mobil Corp. (NYSE: XOM) have risen by almost 60% over the past 12 months. The world’s five supermajor oil companies (Exxon, Chevron, BP, Shell and TotalEnergies) raked in an estimated total of $190 billion in profits last year. A large share of that profit is headed for investors through dividend hikes and share buybacks. Friday morning, Chevron announced a dividend increase and a new $75 billion buyback plan that represents more than 20% of the oil giant’s market cap. Will Exxon match that? Will the Biden administration do anything but scold oil companies for making outrageous profits at consumers’ expense? Stay tuned.
Of 29 analysts covering the stock, 12 rate the shares at Hold, nine have Strong Buy ratings and seven rate the shares at Buy. At a price of around $118.00 a share, the upside potential based on a median price target of $110.00 is 3.4%. At the high target of $140.00, the upside potential is 18.6%.
Fourth-quarter revenue is forecast at $60.21 billion, down 11.0% sequentially but up 6.2% year over year. Adjusted EPS are pegged at $3.29, down 26.1% sequentially but 60.5% higher year over year. For the full 2022 fiscal year, estimates call for EPS of $13.89, up 158.2%, on sales of $411.36 billion, up 44%.
Exxon shares trade at 8.5 times expected 2022 EPS, 10.8 times estimated 2023 earnings of $10.88 and 12.0 times estimated 2024 earnings of $9.82 per share. The stock’s 52-week range is $73.65 to $117.78, and the high was posted Thursday. Exxon pays an annual dividend of $3.64 (yield of 3.09%). Total shareholder return for the past 12 months was 62.1%.
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