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Caterpillar
(NYSE:CAT)
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Rating:71Outperform
Price Target:
$865.00
▼(-2.67% Downside)
Action:Reiterated
Date:06/12/26
CAT scores well primarily on strong financial performance (solid margins and very strong free cash flow) and an upbeat earnings outlook supported by record backlog and raised long-term targets. The score is held back by expensive valuation (high P/E, low yield), mixed near-term technicals, and meaningful tariff-driven margin headwinds highlighted in guidance.
Positive Factors
Strong free cash flow generation
Caterpillar's sustained high operating and free cash flow provides durable funding for reinvestment, capacity expansion, dividends and buybacks. Robust cash conversion supports capital allocation flexibility through cycles and underpins long-term shareholder returns and strategic investments.
Negative Factors
Elevated leverage limits flexibility
A ~2.0x debt-to-equity profile constrains financial flexibility during downturns, increases refinancing and interest risk, and means high returns are partly leverage-driven. The noted inconsistency in reported TTM debt reduces confidence in leverage reporting and risk assessment.
Read all positive and negative factors
Positive Factors
Negative Factors
Strong free cash flow generation
Caterpillar's sustained high operating and free cash flow provides durable funding for reinvestment, capacity expansion, dividends and buybacks. Robust cash conversion supports capital allocation flexibility through cycles and underpins long-term shareholder returns and strategic investments.
Read all positive factors
Caterpillar Key Performance Indicators (KPIs)
Any
Revenue by Type
Categorizes income based on product or service type, highlighting which offerings drive the most sales and where diversification or concentration risks may lie.
Categorizes income based on product or service type, highlighting which offerings drive the most sales and where diversification or concentration risks may lie.
Data provided by:
The Fly
The FlyCaterpillar (CAT) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$360.55B
Dividend Yield0.76%
Average Volume (3M)3.31M
Price to Earnings (P/E)41.7
Beta (1Y)1.12
Revenue Growth11.85%
EPS Growth-2.07%
CountryUS
Employees118,000
SectorIndustrials
Sector Strength72
IndustryAgricultural - Machinery
Share Statistics
EPS (TTM)20.18
Shares Outstanding460,637,020
10 Day Avg. Volume2,625,964
30 Day Avg. Volume3,309,871
Financial Highlights & Ratios
PEG Ratio-2.06
Price to Book (P/B)12.54
Price to Sales (P/S)3.95
P/FCF Ratio26.01
Enterprise Value/Market Cap<0.01
Enterprise Value/Revenue<0.01
Enterprise Value/Gross Profit<0.01
Enterprise Value/Ebitda<0.01
Forecast
1Y Price Target
$1,008.57Price Target Upside13.48% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering16
EPS Forecast (FY)24.78
Revenue Forecast (FY)$77.01B
Caterpillar Business Overview & Revenue Model
Company Description
Caterpillar Inc., a global enterprise founded in 1925 and headquartered in Deerfield, Illinois (having previously operated as Caterpillar Tractor Co. until its rebranding in 1986), is a premier manufacturer and vendor of heavy construction and min...
How the Company Makes Money
Caterpillar makes money primarily by selling new equipment, selling high-margin aftermarket products and services over the life of that equipment, and earning income from financing.
1) Sales of new equipment (primary revenue driver):
- Machinery:...
Caterpillar Earnings Call Summary
Earnings Call Date:Apr 30, 2026
(Q1-2026)
| % Change Since: |
Next Earnings Date:Aug 04, 2026
Earnings Call Sentiment Positive
The call conveyed strong operational and financial momentum: double-digit revenue growth (22% YoY), record backlog (+79% YoY), record orders, improved full-year outlook (low double-digit revenue growth), raised long-term targets and a major capacity expansion to capture data center and prime power demand. These positives were balanced against meaningful near-term headwinds from tariffs (Q1 ~$600M; full-year $2.2–$2.4B), margin pressure in Resource Industries (profit down 39%, margin down ~700 bps) and elevated near-term costs tied to capacity expansion, depreciation and strategic investments. Overall the business trajectory and balance sheet strength, together with record backlog and cash returns to shareholders, outweigh the tariff and timing challenges, and management increased long-term growth ambition while preserving financial discipline.Positive Updates
Revenue and Volume Growth
Sales and revenues of $17.4 billion, up 22% year-over-year, driven by higher sales volume and favorable price realization across segments.
Negative Updates
Significant Tariff Headwind
Tariffs remain a material drag: Q1 tariff costs of ~$600 million and full-year 2026 tariff cost guidance of $2.2–$2.4 billion. Tariffs materially reduced segment margins (e.g., Construction Industries ~550 bps impact; Power & Energy ~270 bps; Resource Industries ~500 bps).
Read all updates
Q1-2026 Updates
Positive
Negative
Revenue and Volume Growth
Sales and revenues of $17.4 billion, up 22% year-over-year, driven by higher sales volume and favorable price realization across segments.
Read all positive updates
Company Guidance
Caterpillar guided to low‑double‑digit full‑year 2026 sales and revenues growth with adjusted operating profit margin expected near the bottom of its progressive target range (but in the top half excluding tariff costs), and updated its 2026 tariff estimate to $2.2–$2.4 billion (Q1 tariff impact ~$600M; Q2 ~ $700M with ~50% in Construction Industries and ~25% each in Power & Energy and Resource Industries). For Q2 the company expects continued strong sales growth and favorable price realization across all three primary segments, higher margins excluding tariffs (partially offset by higher manufacturing, SG&A and R&D), and continued services growth; backlog entering the year was a record $63 billion (up $28B, +79% YoY). Financial assumptions include MP&E free cash flow higher than 2025 (2025 was ~$9.5B) with nearly $600M in MP&E FCF in Q1, 2026 CapEx ~ $3.5B (Q1 CapEx ~$700M), MP&E CapEx averaging ~4–5% of MP&E sales through 2030, planned share returns (deployed $5.7B in Q1 including a $4.5B ASR), restructuring of ~$300–$350M for 2026, and an estimated annual effective tax rate of ~23% (ex‑discrete items). Longer term, management raised its 2024–2030 enterprise sales CAGR target to 6–9%, increased the 2030 power generation sales target to >3x 2024 levels, and is expanding large reciprocating engine capacity from ~2x 2024 to nearly 3x (adding roughly 15 GW of annual capacity when complete).Caterpillar Financial Statement Overview
Summary
Income Statement
82
Very Positive
Balance Sheet
63
Positive
Cash Flow
86
Very Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 70.75B | 67.59B | 64.81B | 67.06B | 59.43B | 50.97B |
| Gross Profit | 23.01B | 21.86B | 23.32B | 23.26B | 17.51B | 15.00B |
| EBITDA | 15.57B | 14.86B | 16.04B | 15.71B | 11.41B | 11.04B |
| Net Income | 9.42B | 8.87B | 10.79B | 10.34B | 6.71B | 6.49B |
Balance Sheet | ||||||
| Total Assets | 95.55B | 98.58B | 87.76B | 87.48B | 81.94B | 82.79B |
| Cash, Cash Equivalents and Short-Term Investments | 4.07B | 9.98B | 6.89B | 6.98B | 7.00B | 9.25B |
| Total Debt | 43.07B | 43.33B | 38.41B | 37.88B | 36.99B | 37.79B |
| Total Liabilities | 76.89B | 77.27B | 68.27B | 67.97B | 66.05B | 66.28B |
| Stockholders Equity | 18.66B | 21.32B | 19.49B | 19.49B | 15.87B | 16.48B |
Cash Flow | ||||||
| Free Cash Flow | 11.45B | 10.27B | 8.82B | 9.79B | 5.17B | 4.73B |
| Operating Cash Flow | 12.32B | 11.74B | 12.04B | 12.88B | 7.77B | 7.20B |
| Investing Cash Flow | -6.31B | -4.71B | -2.45B | -5.87B | -2.54B | -3.08B |
| Financing Cash Flow | -5.35B | -3.90B | -9.56B | -6.93B | -7.28B | -4.19B |
Caterpillar Technical Analysis
Negative
888.73
Price Trends
919.57
Negative
851.56
Negative
734.00
Positive
Market Momentum
-16.09
Positive
43.31
Neutral
41.59
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CAT, the sentiment is Negative. The current price of 888.73 is below the 20-day moving average (MA) of 898.14, below the 50-day MA of 919.57, and above the 200-day MA of 734.00, indicating a neutral trend. The MACD of -16.09 indicates Positive momentum. The RSI at 43.31 is Neutral, neither overbought nor oversold. The STOCH value of 41.59 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for CAT.
Caterpillar Risk Analysis
Caterpillar disclosed 14 risk factors in its most recent earnings report. Caterpillar reported the most risks in the "Legal & Regulatory" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Caterpillar Peers Comparison
UnderperformOutperform
Sector (63)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
77 Outperform | $70.45B | 29.04 | 17.16% | 2.05% | -10.49% | -18.64% | |
72 Outperform | $8.82B | 17.37 | 12.32% | 1.39% | 1.93% | -12.16% | |
71 Outperform | $360.55B | 41.67 | 47.51% | 0.69% | 11.85% | -2.07% | |
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% | |
62 Neutral | $8.41B | 11.92 | 12.45% | 0.97% | -3.80% | ― | |
61 Neutral | $164.92B | 36.17 | 18.25% | 1.03% | 3.98% | -14.68% | |
51 Neutral | $13.34B | 37.06 | 4.99% | 0.90% | -4.04% | -62.88% |
* Industrials Sector Average
CAT
Caterpillar
814.81
389.94
91.78%
AGCO
Agco
102.16
-10.32
-9.17%
CNH
CNH Industrial
10.25
-2.10
-17.00%
DE
Deere
592.67
97.89
19.78%
OSK
Oshkosh
142.41
13.31
10.31%
PCAR
Paccar
132.68
38.58
41.00%
Caterpillar Corporate Events
DividendsShareholder Meetings
Caterpillar boosts quarterly dividend following shareholder meeting
Positive
Jun 11, 2026
At its virtual annual meeting on June 10, 2026, Caterpillar Inc. shareholders re-elected all board nominees to one-year terms, ratified PricewaterhouseCoopers as independent auditor for 2026 and approved executive compensation in an advisory vote,...
Stock BuybackDividendsFinancial Disclosures
Caterpillar Delivers Strong First-Quarter 2026 Revenue and Earnings
Positive
Apr 30, 2026
Caterpillar reported a strong first quarter of 2026 on April 30, with sales and revenues rising 22% year-on-year to $17.4 billion, driven primarily by a $2.3 billion increase in sales volume and $426 million in favorable pricing. Profit per share ...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.