Caterpillar (CAT  ) shares were down following the company's Q1 earnings results which showed it topping estimates on the top and bottom line. Until about a month ago, Caterpillar shares had been major outperformers in 2022 but shares are sagging lower as investors are increasingly getting concerned about recession risk.

YTD, Caterpillar shares are down 4% YTD which is significantly better than the S&P 500's (SPY  ) YTD decline of 18%. And, the company's operating results have been quite strong due to increased levels of production with relief in the semiconductor situation and strength in commodity prices.

In fact, Caterpillar shares have been range-bound since January 2021. Since then on a trailing twelve-month basis, revenue has climbed from $42 billion to $52 billion, and EPS has nearly doubled as well. For investors, CAT's earnings are of particular interest in terms of being a bellwether for the global economy.

Inside the Numbers

For those investors who don't believe in the recession narrative, CAT could be a fantastic opportunity, while those who do could see an opportunity to short.

In Q1, the company reported adjusted earnings per share of $2.87 which was one cent above last year's EPS of $2.86 per share, and also beat analysts' expectations of $2.60 per share. Revenue was 14% higher, reaching $13.6 billion while analysts were looking for $13.4 billion.

In Q2, Caterpillar expects continued growth with $14.6 billion in revenue. It also believes its profit margins should increase in the back of the year.

One factor in its revenue growth is that dealers are restocking inventories. But, the biggest challenge remains rising costs which led to a contraction in profit margins from 15.3% to 13.7%.

Clearly, CAT's earnings indicate that a recession in Q1 or Q2 is unlikely. A similar message was also seen in the earnings report of steel companies which also had record profits due to strong demand. Higher energy prices are also leading indicators of steel demand. However, higher steel prices are one factor in CAT's costs continuing to rise.

Overall, CAT's shares look quite attractive from a growth and value perspective for investors who want to bet against the recession thesis. The stock has a forward P/E of 13.7, a solid record of dividend growth, and expectations of double-digit growth in 2022.