Equity Analyst

Gervin Gayan

Analyst at LightStream Research covering Asian equities, along with thematic research.

Caterpillar (CAT) - Earnings Strength Suggests Cycle Peak Is Still a Few Quarters Away

Long-Short Analysis on Japan, Asia and the World

LightStream Research

LightStream conducts quantitatively rigorous and data-driven analysis with a focus on Japan and Asia.

We consistently cover the Tech, Consumer and Industrial sectors, and provide ECM and Events coverage more broadly.

We supplement traditional qualitative insights from company relationships with a robust quantitative foundation that examines as much historical data as is available.
We further refine the accuracy of our insights and calls through the use of alternative data to flesh out current trends, and through a valuation framework that emphasises non-superficial peer group selection and a proper attempt to understand the metrics and changes that have driven security valuations in the past.

Equity Bottom-Up

Robust Volume Growth Underpins Strong 1Q ResultsCAT’s revenue was up by 31% YoY in 1Q18 to reach USD12.9bn, mainly due to robust growth in sales volume in construction machinery as retail sales increased 33% YoY. Nearly 44% of the revenue came from the Construction Industry, followed by the Resource Industry (18%) and Energy &amp; Transportation (41%).Improvement in OP Margin increases CAT’s EPS, Supported by Corporate Tax Reduction<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/053/130/original/C4.PNG?1526997422" class="editor-image img-responsive" data-smartkarma-image-id="53130"></figure><div class="content-remarks">                          Source: Company Disclosures</div>

Robust Volume Growth Underpins Strong 1Q ResultsCAT’s revenue was up by 31% YoY in 1Q18 to reach USD12.9bn, mainly due to robust growth in sales volume in construction machinery as retail sales increased 33% YoY. Nearly 44% of the revenue came from the Construction Industry, followed by the Resource Industry (18%) and Energy &amp; Transportation (41%).Improvement in OP Margin increases CAT’s EPS, Supported by Corporate Tax Reduction                          Source: Company Disclosures

Can CAT’s Strong Start, Help to Achieve Revised FY18 Guidance?

Caterpillar Inc

Can CAT’s Strong Start, Help to Achieve Revised FY18 Guidance?