Track the companies that matter to you. It's FREE! Click one of these fan favorites to get started: Apple; Google; Ford.



Will Caterpillar Top the Dow in 2013?

As December comes to a close, 2013 is just around the corner, and it's a good time to look at the future prospects for the stocks you own. If you don't know where a company's headed in the next year and beyond, then it's impossible to make an informed decision about whether you should add the stock to your portfolio -- or sell it if you already own it.

Today, I'll look at Caterpillar (NYSE: CAT  ) . Caterpillar has been a member of the Dow Jones Industrials (DJINDICES: ^DJI  ) since 1991, but it's largely been stuck in neutral during 2012 as it tries to navigate a choppy economic environment both in the U.S. and abroad. With the fiscal cliff still looming, can Caterpillar make solid advances next year? Below, you'll see more about Caterpillar's prospects for 2013.

Stats on Caterpillar

Average Stock Target Price


Full-Year 2012 EPS Estimate


Full-Year 2013 EPS Estimate


Full-Year 2012 Sales Growth Estimate


Full-Year 2013 Sales Growth Estimate


Forward P/E


Source: Yahoo Finance.

Will Caterpillar keep building in 2013?
Analysts are forecasting modest gains for Caterpillar in 2013, with the current price target translating to an advance of more than 10% for the stock. But as sales and earnings estimates show, the gains will have to come from multiple expansions, as the company seems pessimistic about its ability to keep growing fundamentally.

Caterpillar's recent struggles stem from the slowdown in global economic growth. Even powerhouses like China, which seemed immune to slowdowns in Europe and the U.S., have started to see slowing growth, and that's part of what weighed down Caterpillar shares in 2012. In particular, a slowdown in mining led Rio Tinto (NYSE: RIO  ) and other mining companies to slow down their production, leaving Caterpillar and rival Joy Global (NYSE: JOY  ) to retrench after expanding capacity there in recent years. But with China spending more than $150 billion to bolster the nation's infrastructure, Caterpillar should get more than its fair share of that money to boost its business.

More broadly, improving economic conditions could bring a new bull run for Caterpillar. But the company will see more competition from General Electric (NYSE: GE  ) in 2013 as it starts to move forward with its foray into the mining-equipment business. With Caterpillar having gotten used to dominating its domestic competition, GE's entry will change the dynamics of the entire industry.

Unlike many short-term-focused players, Caterpillar has already given investors guidance as far out as 2015. Throughout the coming year, be sure to gauge how the company does compared to that somewhat cautionary guidance and look for signs of improvement that could point to better profit opportunities down the road.

Learn more
We've got the full scoop on Caterpillar in our in-depth research report, which goes through the company's many products and services around the world. Find out whether Caterpillar is a buy right now by picking up the report today. It's easy to get your copy; just click here to access it now.

Click here to add Caterpillar to My Watchlist, which can find all of our Foolish analysis on it and all your other stocks.

Read/Post Comments (0) | Recommend This Article (8)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2168231, ~/Articles/ArticleHandler.aspx, 10/25/2016 1:14:43 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated 3 hours ago Sponsored by:
DOW 18,223.03 77.32 0.43%
S&P 500 2,151.33 10.17 0.47%
NASD 5,309.83 52.43 1.00%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

10/24/2016 4:00 PM
CAT $85.99 Down -0.34 -0.39%
Caterpillar CAPS Rating: ***
GE $28.92 Down -0.06 -0.21%
General Electric CAPS Rating: ****
JOY $27.90 Up +0.01 +0.04%
Joy Global CAPS Rating: ****
RIO $33.12 Up +0.25 +0.76%
Rio Tinto CAPS Rating: ***