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Analyzing Caterpillar Stock since Its Q2 Earnings

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Oct. 22 2018, Published 9:30 a.m. ET

Caterpillar’s third-quarter earnings

In a press release on October 9, Caterpillar (CAT) said that it would announce its third-quarter earnings results before the market opens on October 23. Management will hold a conference at 11:00 AM EST on October 23 to discuss the results.

In this series, we’ll discuss how Caterpillar stock has performed since its first-quarter earnings were released. We’ll review analysts’ revenue and earnings estimates for the third quarter.

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Caterpillar announced its second-quarter earnings on July 30. Since then, the stock has fallen ~6%. In comparison, Illinois Tool Works (ITW) and Stanley Black & Decker (SWK) have declined 9% and 17%, respectively, while Deere (DE) has gained 5.6%. Caterpillar also underperformed the S&P 500 (SPY), which has fallen 1.2%.

Since Caterpillar’s second-quarter earnings, the stock has remained positive due to the positive outlook from several analysts and the expectation of another strong performance in the upcoming quarter. The latest sell-off in the second week of October caused the stock to decline. However, the market recovery and a strong third quarter could help the stock recover.

Moving average and RSI

Currently, Caterpillar is trading 8.5% below its 100-day moving average of $143.54, which implies weakness in its stock. However, Caterpillar’s RSI (relative strength index) of 27 indicates that the stock has moved into an “oversold” position. An RSI of 30 or below indicates that the stock has moved into an “oversold” situation.

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