The primary reason for the subsequent rally in the company’s stock was the assurance provided by the management that the company would cut production to match dealer demand. Trefis quantifies the impact of Caterpillar’s cost-cutting efforts on its stock price in its interactive dashboard What Is The Upside To Caterpillar’s Stock if it Can Reduce Costs In Q4’19? How Is Caterpillar’s Stock Likely To Benefit? If the management is successfully able to cut costs and reduce production levels, it would positively impact the company’s bottom line. Using this figure with our estimated forward P/E ratio of 13x, this works out to a price estimate of $143 for Caterpillar’s Stock.

Source: Forbes November 05, 2019 16:30 UTC