Baird Highlights Backlog Strength and Earnings Visibility at Caterpillar (CAT)

Caterpillar Inc. (NYSE:CAT) is included among the Dividend Growth Stocks: 25 Aristocrats.

On January 30, Baird raised its terms people connected Caterpillar Inc. (NYSE:CAT) to $805 from $680 and maintained an Outperform rating. The steadfast updated its exemplary aft reviewing fourth-quarter results that pointed to a ample backlog, coagulated net visibility, and returns connected invested superior that proceed to tally up of expectations.

A Reuters study said Caterpillar’s fourth-quarter show reflected the broader planetary economy. Sales benefited from a surge successful spending tied to artificial intelligence, adjacent arsenic the institution warned investors astir a imaginable tariff interaction of much than $2 cardinal successful the twelvemonth ahead. Like respective ample exertion names, Caterpillar and different concern companies person leaned into the AI communicative to enactment capitalist interest. Over the past year, the banal has climbed astir 60%, astir 4 times the summation of the S&P 500 implicit the aforesaid period.

The AI roar has reshaped Caterpillar’s concern mix. Power and vigor is present the company’s largest conception by sales, overtaking its long-standing operation unit. Demand has been particularly beardown for “prime power” systems. These ample generators are built to present continuous, round-the-clock electricity.

On the post-earnings call, CEO Joe Creed said information halfway customers are progressively turning to on-site powerfulness solutions arsenic they enactment to support up with accelerated growth.

Caterpillar Inc. (NYSE:CAT) manufactures operation and mining equipment, off-highway diesel and earthy state engines, concern state turbines, and diesel-electric locomotives.

While we admit the imaginable of CAT arsenic an investment, we judge definite AI stocks connection greater upside imaginable and transportation little downside risk. If you’re looking for an highly undervalued AI banal that besides stands to payment importantly from Trump-era tariffs and the onshoring trend, spot our escaped study connected the best short-term AI stock.

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Disclosure: None.