Caterpillar (NYSE: CAT) stock dropped 9% since its most recent earnings report as the world's largest construction equipment manufacturer faces a dwindling backlog amid higher interest rates. Anytime a stock for an industry leader drops due to macroeconomic challenges, investors should determine whether there is a potential buying opportunity.
So let's examine Caterpillar's latest financial snapshot, its valuation, and management's capital allocation to determine whether investors should buy the discounted stock or stay away.
Starting with the bad, Caterpillar generated $15.8 billion in sales and revenue for Q1 2024, a slight year-over-year decrease from $15.9 billion. Management blamed lower sales volume for the decline in sales, most notably in Europe, the Middle East and Africa, and the Asia-Pacific region.
Source Fool.com