Caterpillar: demand exceeds supply

Citi affirmed a Neutral rating on Caterpillar stock in a note Wednesday. However, the bank lowered its target price on the stock to $180 a share from $195.

The bank said it received feedback after meeting with executives from several CAT dealer groups in North America indicating that demand exceeds supply at this point.

Citi writes that despite continued supply problems, the feedback on demand has been generally positive. The bank believes that competition in North America will intensify as foreign supply is attracted by a strong U.S. dollar and a relatively steady demand picture. Citi says its view of 2023 as the most likely peak year for CAT earnings is supported by dealer views, plus, such a cycle is proving to be unique in many ways.