In the midst of a bull market carried by tech stocks, we look at a blue chip company today: Caterpillar Inc.
A Fortune 100 corporation with revenue of $41Bn, the Deerfield, IL firm designs, develops, engineers, manufactures, markets, and sells machinery, engines, financial products, and insurance to customers via a worldwide dealer network. It is the world’s largest construction-equipment manufacturer.
In the past 12 months, CAT appreciated over 50% and reached a current market cap of $116Bn, but how can we justify this valuation with market data, let’s take a look.
Even as analysts consensus estimates envision Caterpillar outperforming most of its peers in both growth (e.g. 5.3% in 2023 vs peer median of 3.4%) and profitability (19.4% EBITDA margin and 11.9% Net Income margin by 2025, more than twice peers median on both metrics), a simple DCF yields a more conservative valuation of about $60Bn, almost half of today’s market cap.
Looking at trading multiples and precedent transactions extends the range into the mid $80Bn’s but nevertheless it appears that CAT is valued richly by the markets today. Share your thoughts with us or investigate our valuation work with the link below.
Weekly valuations: Caterpillar link to the valuation here
Other recent valuations: Snowflake | Krispy Kreme |Bumble
Valutico is the world‘s leading provider of web-based company valuation tools.
Valutico is a web based valuations platform providing the financial services industry and valuation practitioners with data-driven tools to conduct analysis more efficiently. With headquarters in Vienna and subsidiaries in the UK & USA Valutico empowers businesses and experts to perform accurate valuations in minutes while solving the issue of complex tools, lack of data sources and time consuming reporting.
Valutico provides access to reliable market data from leading financial databases, cross-checks business plans and provides useful suggestions to promote consistency and plausibility. With over 15 of the world’s leading valuation methodologies to choose from and saving experts precious time transferring results from spreadsheet to slides, Valutico is carving a new generation in valuations.
4.4 / 5
