Bank of America Raises Price Target on Caterpillar (CAT)

Bank of America Merrill Lynch reported on Wednesday that they have increased their price target for construction and mining equipment manufacturer, Caterpillar Inc.(CAT).

The firm has reaffirmed a “Neutral” rating on CAT, and has raised its price target for the company from $92 to $100. This price target suggests a 5.7% increase from the stock’s current price of $94.24.

An analyst from the firm noted, “as the global leader, CAT is a global powerhouse in mining, construction, and power systems equipment. CAT is very well positioned for the long-term, but the slower earnings trajectory that we foresee in coming years due to fading momentum in mining equipment demand and a softer construction equipment outlook will likely limit the stock’s multiple expansion potential, in our view.”

Caterpillar shares were mostly flat during Wednesday afternoon trading. The stock has dropped 3% in the past year.

The Bottom Line
Shares of Caterpillar (CAT) have a 2.21% dividend yield, based on the latest intraday stock price of $94.29. The stock has technical support in the $87-$90 price area. If the shares can firm up, we see overhead resistance around the $97-$100 price levels.

Caterpillar Inc.(CAT) is not recommended at this time, holding a Dividend.com DARS™ Rating of 3.3 out of 5 stars.

Be sure to visit our complete recommended list of the Best Dividend Stocks, as well as a detailed explanation of our ratings system here.

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