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The post-pandemic economy has been positive for CAT due to higher levels of infrastructure spending, a strong housing market, a recovery in the industrial sector, and high levels of CAPEX that are expected to persist over the next decade. As a result, CAT’s stock is up more than 130% from its lows in March 2020.
Despite these gains, the stock remains attractively priced with a price-to-earnings ratio (P/E) that is below the S&P 500. Longer-term fundamentals remain bullish, and the 20% dip in the stock price is providing a good entry point from a risk/reward perspective.
