Trader Guy Adami said the equipment manufacturer has a history of "negative commentary post-earnings." Adami said the main reason why Caterpillar shares have rallied this year is because investors are attracted to the stock's dividend. He also said the stock feels expensive at its current valuation.
As of their Tuesday close, Caterpillar shares had a price-to-earnings ratio was 49.1 on a trailing 12-month basis, according to FactSet.
Trader Pete Najarian agreed and said investors who currently hold the stock should consider taking profits off the table. He said that investors who want to buy the stock should wait for a "significant pullback."
Caterpillar's issues are pretty specific and don't necessarily apply to other companies in the equipment space, said trader Karen Finerman. She said she still likes United Rentals.