Caterpillar: the aftermarket is the business and it is undervalued
Aftermarket and services now contribute the majority of segment profit and grow independently of the equipment cycle. The whole company is still valued as a cyclical.
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Discussion · 5
Reading this against my own model. The installed base argument is stronger than the cycle argument here. Would you underwrite this without the catalyst date?
I think the setup matters more than the thesis here. I had not appreciated how much of this is already in consensus. Does the same logic apply to the closest comparable?
Fair challenge. Invalidation is a close below the lock price on volume, and I should have written that into the card rather than leaving it implicit. (767)
Reading this against my own model. The mix argument is the part I had not considered properly. What does the bear actually have to be right about?
Not convinced, but well argued. The comp table did more work for me than the narrative did. Curious whether you would still size it the same at a higher entry.