Analysts are seeing signs that Caterpillar Inc. (NYSE: CAT) is beginning to improve, albeit slowly, and its valuations remain attractive. This well-managed firm has a strong balance sheet and a focus on returning capital to shareholders. Despite this sentiment and recent outperformance, analysts are taking a backseat on this stock, expecting the share price to subside. Argus has one of the few Buy ratings on the stock, and the independent research firm further details it in a recent report.

Keep in mind that the business is highly cyclical, and various commodity and currency trends are not currently in the company’s favor. In the most recent call, though, management touched on some positive developments among its businesses. Moreover, from a macro basis, key commodity prices have begun to firm, which could lead to better results for the company.

Despite the recent run, the shares appear to offer value, and there are some bright spots in the latest results. Argus issued a price target of $92, which implies upside of 20% from current levels but is still 20% below the latest cycle highs.

Earlier this month, Caterpillar reported its first-quarter results that were sharply lower year over year and also slightly below consensus forecasts. Sales of $9.5 billion declined a sequentially steeper 25% year over year, while earnings per share (EPS) fell 68% to $0.67.

Along with the results, Caterpillar management provided an updated outlook for 2016. The company has once again lowered expectations for results. Management now expects sales to fall in range of $40 billion to $42 billion and EPS of roughly $3.70, down from a previous $4.00. The estimates imply a sales decline of roughly 13% and an earnings decline of 45%.

The shares have shown strength relative to the market over the past quarter, rising 30%, compared to a 9% gain in the S&P 500 and a 14% increase in the industrial sector exchange traded fund. However, over the past year the shares are down 10%, while the sector has been flat and the market has fallen 1.5%.

Shares of Caterpillar were trading up 0.9% at $77.47 on Tuesday, with a consensus analyst price target of $67.06 and a 52-week trading range of $56.36 to $89.62.

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