trending Market Intelligence /marketintelligence/en/news-insights/trending/YGcuUvFsS3ZrkrWM8JG2uQ2 content esgSubNav
In This List

Fitch revises Caterpillar's outlook to stable

Blog

Spotlight on sustainability How banks can overcome the challenges of achieving Net zero by 2050

Blog

Insight Weekly: US election scenarios; borrowing costs rise; commercial REIT fears

Podcast

Street Talk | Episode 100 - KBW CEO offers optimism for bears fearful of bank liquidity, credit

Blog

Insight Weekly: Stocks endure more pain; bank branch M&A slows; debt ratios fall


Fitch revises Caterpillar's outlook to stable

Fitch Ratings on Dec. 7 affirmed the long-term issuer default rating for Caterpillar Inc. (CAT) at A and revised its ratings outlook to stable from negative.

The outlook revision is based on Fitch's expectation that CAT's financial results will improve while leverage will decrease as CAT's end markets recover from cyclically low demand and CAT reaps rewards of a lower cost structure.

Fitch also cited debt reduction during 2017, disciplined cash deployment and focus on balancing profitability and sales growth.

The rating strengths for CAT included its broad product lines, diverse customer base, flexibility, global presence, solid liquidity and well-capitalized independent dealer network.

Fitch noted that working capital requirements could limit free cash flow but its effects will be limited by strong margin improvements realized in 2017 and the minimal incremental investment required in the medium term for supporting future sales growth.

The rating agency also expects CAT to improve its EBITDA and reflect favorable incremental margins after restructuring costs that cost $3.2 billion from 2015 to 2017.