Caterpillar (CAT) Management Call Highlights Digital Initiatives to Boost Parts Sales - Goldman Sachs

Goldman Sachs analyst Jerry Revich reiterated a Buy rating and $264.00 price target on Caterpillar (NYSE: CAT) after hosting Ogi Redzic, Chief Digital Officer, for an investor call to discuss how CAT Digital can double its Parts & Service business to $28 bn by 2026. Key takeaways include:

• CAT Inspect App contributed to ~$300 mn of preventive maintenance dealer revenue in 2020, by our estimates.
• My.Cat.Com CAT App desktop companion had 900,000 registered subscription assets (including some non-CAT and some non-connected machines) compared to CAT’s connected machine population of 1+ mn.
• CAT takes the data from over 1 mn connected assets and combines it with 20+ other data sources (e.g. dealer work order invoices, inspections), building proprietary algorithms (Prioritized Service Events, or PSEs) that tell dealers which important service events are likely to come in the near future, which is then used to generate qualified leads for dealers.
• As a percentage of sales, CAT expects outsized growth in e-commerce over the next five years. In 2020, CAT’s e-commerce channels interacted with 5.5 mn users, and 47,000 companies made an online purchase in the last 12 months.

For an analyst ratings summary and ratings history on Caterpillar click here. For more ratings news on Caterpillar click here.

Shares of Caterpillar closed at $237.71 yesterday.

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