Caterpillar Earnings: Demand Still Looks Solid, Despite Flattening Dealer Inventories in 2023

We’re maintaining our $209 fair value estimate for Caterpillar, following first-quarter earnings. We saw no surprises in the earnings print. Demand still looks healthy, given end user demand has held up well in recent quarters. The company reported good machinery sales growth across its segments, leading to 17% year on year growth on a consolidated basis. Operating margins also came in at solid levels, expanding by 400 basis points to 17.3%. The company has been effective at raising prices to respond to cost inflation.