Jim Cramer’s Latest Game Plan: 20 Stocks to Watch

17. Caterpillar Inc. (NYSE:CAT)

Number of Hedge Fund Holders: 49

Cramer praised Caterpillar Inc.’s (NYSE:CAT) CEO and said that the upcoming quarter can be quite strong.

“When we walked around the floating platform in the Gulf of Mexico yesterday, I peeked at all the nameplates on every machine I saw, and the predominant one, it was Caterpillar, which makes solar turbines… that would power a great deal of activity on the platform. Chevron CEO Mike Wirth reminded me that Jim Umpleby, the CEO of Caterpillar, actually came from that division. CAT reports in the morning, I think it could be very very strong. I just don’t know if it’ll be strong enough to move what has been an incredibly hot stock. If they look at that runup, I wouldn’t be surprised if it actually gave up some of that. It’s up 30% for the year.”

Caterpillar (NYSE:CAT) is a leading manufacturer and seller of a wide range of equipment, including construction and mining machinery, off-highway diesel and natural gas engines, industrial gas turbines, and diesel-electric locomotives. According to the company’s second earnings call, management had earlier projected that sales and revenues would remain broadly similar throughout the year. However, for the first half of the year, the top-line results fell slightly short of expectations, ending 2% lower than the previous year.

Looking ahead, Caterpillar (NYSE:CAT) forecasts a similar decline in sales and revenues during the second half compared to the prior year, influenced in part by updated assumptions regarding dealer inventory, particularly in the Resource Industries segment. Despite these challenges, management indicated that the adjusted operating profit margin for 2024 is expected to exceed the upper end of the previously set target range. Additionally, full-year adjusted operating profit is now forecasted to be higher than initially anticipated.