Caterpillar, DowDuPont Sink, Tie as Dow's Poorest Performers

Paul Ausick

Caterpillar Inc. (NYSE: CAT) and DowDuPont Inc. (NYSE: DWDP) closed the week in a dead heat for the worst performing Dow Jones industrial average index stock for the year to date. Caterpillar dropped a whopping 12.4% last week and DowDuPont dumped 9.6%. Both stocks have now lost 26.99% in 2018.

The third-worst Dow stock so far this year is 3M Co. (NYSE: MMM), which is down 21.4%. That is followed by International Business Machines Corp. (NYSE: IBM), down 18.7%, Goldman Sachs Group Inc. (NYSE: GS), down 16.6%, and Chevron Corp. (NYSE: CVX), down 10.9%. There are 14 of the 30 Dow stocks that trade lower so far in 2018.

The blue-chip index shed more than 750 points last week to close at 24,688.31, down nearly 3% compared to the previous Friday’s close. For the year to date, the index is down 0.5%, trailing the Nasdaq Composite (up 2.3%) but leading the S&P 500 (down 1.4%).

Caterpillar reported third-quarter results Tuesday morning that were better than estimates on both the top and bottom lines. The stock got hammered, however, on a not-very-impressive outlook. The company said that it expects pricing strength, operational excellence and cost discipline in the fourth quarter “to more than offset higher material and freight costs, including tariffs.” Order backlog is down slightly, prices are going up and the supply chain is not operating smoothly. In other words, the third quarter is as good as it is going to get this year.

Chemicals giant DowDuPont had no news, good or bad, last week. The company is scheduled to announce third-quarter results on Thursday, and given the way things have been going, investors appear to believe that getting out sooner is a better bet than waiting for a positive earnings surprise.

Analysts are forecasting earnings per share (EPS) of $0.72 and revenue of $20.21 billion. The previous week’s announced non-cash impairment charge of some $4.6 billion did not change the company’s guidance or the consensus estimates. But if the company misses, that will put some serious hurt on the stock.

Caterpillar dropped 0.5% on Friday to close the week at $115.05, in a 52-week range of $112.25 to $173.24. The low was posted Wednesday. Analysts have a consensus price target of $155.00 on the stock and the forward price-to-earnings (P/E) ratio is 8.94.

DowDuPont’s stock closed at $52.00 on Friday, down about 1.7% for the day. The 52-week range is $51.32 to $77.08, and the low was posted Friday. The 12-month consensus price target is $88.55, and the forward P/E ratio is 10.92.