Shares of heavy equipment maker Caterpillar Inc. rose 1.4% in premarket trade Tuesday, after Goldman Sachs added the stock to its Conviction Buy list and set a stock price target that’s 30% above current trading levels. “We see an attractive combination of (1) structurally higher mid-cycle EPS, (2) exposure to underinvested machinery markets in the early stages of recovery, (3) management strategy transition towards improving returns on capital (vs. market share in the last cycle), and (4) a ~20% underweight average mutual fund position,” analysts led by Jerry Revich said in a note. Goldman set a stock price target of $120. Shares are down 0.5% in the year so far, while the Dow Jones Industrial Average has gained 5.4% and the S&P 500 has gained 5%.
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