Goldman Sachs Adds Caterpillar to Conviction Buy List

Nov 14, 2011
J. Webster
Comments Off on Goldman Sachs Adds Caterpillar to Conviction Buy List

The great and wise old Goldman Sachs, otherwise known as the vampire squid, has added Caterpillar (CAT) to its conviction buy list. And while many folks like to hate Goldman Sachs, they tend to buy right when they make a call. Today, Caterpillar is trading at around $96 a share, Goldman’s new price target is $118. So that’s a nice nearly 20 point jump if you were to buy the stock right now. Why is Goldman so confident that Caterpillar is an undervalued stock?

“Cyclical outlook is more balanced than the market is discounting for Construction Industries as South America is in the midst of a fleet and infrastructure build-out and North America is early in the cyclical recovery.”

In other words, Goldman Sachs sees Caterpillar involved in the growth and expansion of the emerging markets. And remember, Caterpillar bought the mining equipment maker Bucyrus International for $8.6 billion last year.

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