Caterpillar earned two upgrades from Wall Street firms before the bell Thursday despite releasing weaker-than-expected earnings the day prior. The construction equipment maker earned $4.25 per share in the first quarter excluding items, missing the FactSet consensus forecast of $4.35 a share. Consolidated sales and revenue came in at $14.25 billion, also under the Wall Street estimate of $14.72 billion. The stock finished the day slightly higher despite the poor results. The stock is down more than 26% from its 52-week high on the threat of tariffs curbing demand. Oppenheimer and Baird both found reason to brighten their views on the Dow Jones Industrial Average member. Here’s why: Baird Analyst Mircea Dobre raised his rating to neutral from underperform. Dobre also lifted his price target by $9 to $309, meaning he expects shares to sit around flat over the next year. While earnings came in below expectations, Dobre pointed to the fact that orders and backlogs both rose more than 20% year over year. From here, Dobre said he’d use further downside on the stock tied to macroeconomic concerns as a driver to get more constructive. “The fundamental catalysts warranting a negative view … are at this point baked into fundamentals and expectations,” Dobre wrote to clients. “Going forward, we see some positive signs including better than expected dealer inventories, more resilient demand (admittedly, pre-tariff but still better than peers) and a prudent approach to price vs. cost management in dealing with tariffs.” Oppenheimer Analyst Kristen Owen upgraded the name to outperform from perform. Her $395 price target suggests 27.7% upside over Wednesday’s close. CAT YTD mountain Caterpillar, YTD Owen said the quarter ended up being “better than feared” and can underscore resilience in the demand and margin outlooks. She also cited the stock’s fall of more than 14% year-to-date as reason to believe some challenges are already priced in. “Acknowledging the macro uncertainty and potential downside risks, we view the YTD pullback offering an attractive entry point for long-term shareholders, supporting our constructive stance,” Owen wrote.
