Is Caterpillar Stock A Buy At $290 After A Solid Q2 Beat?

Caterpillar stock (NYSE: CAT) was up 9% yesterday and 17% in a month, significantly outperforming the broader markets, with the S&P500 up 3%. The company posted upbeat Q2 results this week, and after its recent rise, we think it is now appropriately priced, as discussed below. We think investors will likely be better off waiting for a dip to enter CAT stock for better gains in the long run.

Caterpillar’s revenues were up 22% to $17.3 billion in Q2, compared to our forecast of $16.8 billion and the consensus estimate of $16.4 billion. This growth was driven by a 27% rise in energy & transportation sales, while resource industries sales were up 20% and construction industries up 19%. This can be attributed to better price realization and healthy demand trends. The dealer inventory levels also improved during the quarter.