Blue-Chip Stock Pops on the Cool Analyst Cover
Cowen and Company launched CAT cover with an “outperformance” rating
Actions of Caterpillar Inc. (NYSE: CAT) are up 2.4% to $ 193.44 this morning, after Cowen and Company launched blue chip coverage with an “outperforming” rating and a price target of $ 241. The brokerage firm highlighted the company’s stand-alone products, energy technologies, and increased service revenues, which bring a secular growth component to CAT. The analyst also said he sees $ 35 billion in revenue opportunities for the heavy machinery name over the next decade.
Analysts were hesitant about the Caterpillar stock taking effect today, indicating there is more room for upgrades going forward. Of the 15 place settings, nine had a warm “keep” rating, while the remaining six said “buy” or better. Meanwhile, the 12-month consensus target price of $ 224.33 is a healthy 16.1% premium from current levels.
Caterpillar stock has cooled since June 4, a record $ 246.69 in recent months. Stocks appear to have found their way to the $ 188- $ 190 level in recent weeks, although the 20-day moving average has lowered safety since early September. Year over year, CAT continues to show an 18.1% lead.
A change in the option wells could also give Caterpillar shares a boost. This corresponds to the 10-day sell / buy volume ratio of the security on the International Securities Exchange (ISE), Cboe Options Exchange (CBOE) and NASDAQ OMX PHLX (PHLX), which is above 74%. annual readings. This means that the put options have been clawed back at a faster rate than usual lately.
This change seems to be happening already. So far 5,036 calls have crossed the band, double the intraday average. The most popular is the October 195 call, followed by the 192.50 call in that same series, indicating that options players see more benefits for CAT as these contracts expire tomorrow.