Caterpillar (CAT) AI Stock Analysis

• Market Cap: $184.13B
• Dividend Yield: 1.44%
• Average Volume (3M): 2.40M
• Price to Earnings (P/E): 19.1
• Beta (1Y): 1.11
• Revenue Growth: -5.58%
• EPS Growth: -7.37%
• Country: US
• Employees: 112,900
• Sector: Industrials
• Sector Strength: 85
• Industry: Agricultural - Machinery
• EPS (TTM): 4.25
• Shares Outstanding: 470,314,970
• 10 Day Avg. Volume: 3,142,561
• 30 Day Avg. Volume: 2,397,314
• PEG Ratio: -2.44
• Price to Book (P/B): 9.48
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 19.75
• Enterprise Value/Market Cap: 1.11
• Enterprise Value/Revenue: 0.79
• Enterprise Value/Gross Profit: 9.11
• Enterprise Value/Ebitda: 3.17
• 1Y Price Target: $373.46
• Price Target Upside: -4.61% Downside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 13

• Rating: 70 Outperform
• Price Target: $438.00 ▲(11.87%Upside)

Caterpillar's overall stock score reflects strong financial performance and shareholder returns, tempered by technical analysis concerns and mixed earnings call sentiment. The company's resilience and strategic focus on backlog growth are positives, but recent sales declines and tariff impacts pose risks.

Positive Factors

Capacity Expansion

The capacity expansion at the facility will unlock growth that comes at a higher per unit profit than what’s currently in the P&L.

Energy Demand Growth

Caterpillar is well positioned to capture structural growth in energy demand, benefiting from trends in data centers, distributed power, and natural gas.

Negative Factors

Dealer Inventories Concern

Some investors remain concerned that increases in dealer inventories could be a significant headwind into 2025.

Tariffs and Economic Caution

The biggest headwind will be price/cost issues, exacerbated by $1.2B in tariffs.

Caterpillar Business Overview & Revenue Model

Company Description

Caterpillar Inc. is a leading global manufacturer of construction and mining equipment, diesel and natural gas engines, industrial gas turbines, and diesel-electric locomotives. The company operates through three primary segments: Construction Industries, Resource Industries, and Energy & Transportation, providing essential machinery and technology solutions for infrastructure development, resource extraction, and energy production.

How the Company Makes Money

Caterpillar Inc. generates revenue through the sale of machinery and equipment, which includes construction and mining equipment, engines, and locomotives. The company also earns income from providing financing and insurance services through its Financial Products segment, which supports customer purchases of Caterpillar products. Additionally, Caterpillar offers parts and services to maintain and optimize the performance of its machinery, contributing to a steady stream of aftermarket revenue. Strategic partnerships and a global dealer network enhance its market reach and customer support, further boosting sales and customer loyalty.

Caterpillar Financial Statement Overview

Summary

Caterpillar's financial performance is strong with robust profitability, solid equity, and effective cash management. Despite a recent decline in revenue and moderate leverage, the company's margins and cash flows suggest resilience.

Income Statement

Caterpillar's income statement shows strong performance with a gross profit margin of 35.5% and a net profit margin of 15.7% TTM, indicating healthy profitability. However, the revenue growth rate has been negative recently, with a -6.8% decline in TTM revenue compared to the previous annual period, which may pose a concern if it persists.

Balance Sheet

The balance sheet reflects a robust equity ratio of 21.3% TTM, demonstrating a solid financial foundation. The debt-to-equity ratio stands at 2.1, which is moderate but requires monitoring to avoid excessive leverage. Return on equity (ROE) remains healthy at 55.0% TTM, suggesting effective management of shareholder funds.

Cash Flow

Caterpillar's cash flow metrics are positive, with an operating cash flow to net income ratio of 1.13 TTM, indicating strong cash generation relative to earnings. The free cash flow to net income ratio at 0.86 TTM also highlights efficient cash utilization. However, free cash flow has shown a slight decline of -2.7% from the previous annual period.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	63.26B	64.81B	67.06B	59.43B	50.97B	41.75B
Gross Profit	22.45B	23.32B	23.26B	17.51B	15.00B	12.08B
EBITDA	15.46B	16.04B	15.71B	11.97B	10.63B	7.27B
Net Income	9.94B	10.79B	10.34B	6.71B	6.49B	3.00B
Balance Sheet
Total Assets	84.97B	87.76B	87.48B	81.94B	82.79B	78.32B
Cash, Cash Equivalents and Short-Term Investments	3.56B	6.89B	6.98B	7.00B	9.25B	9.35B
Total Debt	38.59B	38.41B	37.88B	36.99B	37.79B	37.16B
Total Liabilities	66.90B	68.27B	67.97B	66.05B	66.28B	62.95B
Stockholders Equity	18.07B	19.49B	19.49B	15.87B	16.48B	15.33B
Cash Flow
Free Cash Flow	8.59B	8.82B	9.79B	5.17B	4.73B	4.21B
Operating Cash Flow	11.27B	12.04B	12.88B	7.77B	7.20B	6.33B
Investing Cash Flow	-3.59B	-2.45B	-5.87B	-2.54B	-3.08B	-1.49B
Financing Cash Flow	-9.06B	-9.56B	-6.93B	-7.28B	-4.19B	-3.75B

Caterpillar Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 391.51
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CAT, the sentiment is Positive. The current price of 391.51 is above the 20-day moving average (MA) of 373.84, above the 50-day MA of 351.73, and above the 200-day MA of 359.16, indicating a bullish trend. The MACD of 12.98 indicates Negative momentum. The RSI at 72.58 is Negative, neither overbought nor oversold. The STOCH value of 77.82 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for CAT.

Caterpillar Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
OSK	77 Outperform	$8.02B	13.30	15.24%	1.64%	5.95%	-10.59%
OSK	77 Outperform	$8.02B	13.30	15.24%	1.64%	5.95%	-10.59%
PCAR	75 Outperform	$50.73B	14.66	19.90%	1.36%	-8.64%	-31.57%
PCAR	75 Outperform	$50.73B	14.66	19.90%	1.36%	-8.64%	-31.57%
DE	71 Outperform	$138.20B	24.69	24.07%	1.27%	-22.26%	-37.83%
DE	71 Outperform	$138.20B	24.69	24.07%	1.27%	-22.26%	-37.83%
CAT	70 Outperform	$184.13B	19.08	55.67%	1.44%	-5.58%	-7.37%
CNH	66 Neutral	$16.83B	16.21	13.26%	1.83%	-21.99%	-52.11%
CNH	66 Neutral	$16.83B	16.21	13.26%	1.83%	-21.99%	-52.11%
Sector *	65 Neutral	$10.75B	15.69	5.29%	1.89%	3.09%	-27.41%
AGCO	57 Neutral	$8.10B	46.40	-13.60%	1.06%	-23.02%	-152.78%
AGCO	57 Neutral	$8.10B	46.40	-13.60%	1.06%	-23.02%	-152.78%

Caterpillar Corporate Events

Caterpillar Increases Dividend Following Shareholders Meeting

On June 11, 2025, Caterpillar Inc. held its virtual 2025 Annual Shareholders Meeting where all nominated directors were elected, and the appointment of PricewaterhouseCoopers LLP as the independent registered public accounting firm was ratified. However, shareholder proposals for a civil rights audit, a report on employee charitable giving match, and the cessation of DEI efforts were not approved. Additionally, the Board of Directors declared a quarterly cash dividend increase to $1.51 per share, reflecting a 10-cent rise from the previous dividend, demonstrating Caterpillar’s strong operating performance and commitment to returning free cash flow to shareholders.

The most recent analyst rating on (CAT) stock is a Hold with a $415.00 price target. To see the full list of analyst forecasts on Caterpillar stock, see the CAT Stock Forecast page.

Caterpillar Finalizes $2 Billion Senior Notes Sale

On May 12, 2025, Caterpillar Inc. finalized an Underwriting Agreement with several underwriters for the sale of $2 billion in senior notes, which closed on March 15, 2025. The proceeds from these notes, due in 2035 and 2055, will be used for general corporate purposes, potentially including debt repayment, and are part of Caterpillar’s strategy to manage its financial obligations and strengthen its market position.

The most recent analyst rating on (CAT) stock is a Hold with a $415.00 price target. To see the full list of analyst forecasts on Caterpillar stock, see the CAT Stock Forecast page.

Caterpillar Reports Q1 2025 Sales Decline

Caterpillar Inc. reported its first-quarter 2025 results, revealing a 10% decrease in sales and revenues to $14.2 billion compared to the same period in 2024. The decline was attributed to lower sales volume and unfavorable price realization, with changes in dealer inventories impacting sales. The company’s operating profit margin also decreased, and profit per share fell to $4.20 from $5.75 in the previous year. Despite these challenges, Caterpillar maintained a strong balance sheet, deploying $4.3 billion in cash for share repurchases and dividends, highlighting its commitment to shareholder returns and long-term growth strategy.

Caterpillar Appoints Joseph Creed as New CEO

On April 15, 2025, Caterpillar Inc. announced that Joseph E. Creed would become the new Chief Executive Officer and a member of the Board, effective May 1, 2025, succeeding D. James Umpleby III, who will transition to Executive Chairman. Creed, a 28-year veteran of Caterpillar, has held various leadership roles, including Chief Operating Officer, and his appointment is part of a strategic succession plan. The change in leadership comes as Caterpillar celebrates its 100th anniversary, with Creed expected to continue the company’s legacy of excellence and sustainable growth. The announcement also included changes to the compensation packages for both Creed and Umpleby, reflecting their new roles.

Caterpillar Director Daniel Dickinson to Step Down

On April 7, 2025, Daniel M. Dickinson informed Caterpillar Inc.’s Board of Directors that he would not seek re-election at the 2025 Annual Meeting of Shareholders. His decision was not due to any disagreement with the company, and the Board expressed gratitude for his years of dedicated service.