Caterpillar (CAT) AI Stock Analysis

• Market Cap: $263.52B
• Dividend Yield: 1.04%
• Average Volume (3M): 3.06M
• Price to Earnings (P/E): 28.9
• Beta (1Y): 1.18
• Revenue Growth: -1.51%
• EPS Growth: -9.69%
• Country: US
• Employees: 112,900
• Sector: Industrials
• Sector Strength: 72
• Industry: Agricultural - Machinery
• EPS (TTM): 4.95
• Shares Outstanding: 467,979,580
• 10 Day Avg. Volume: 3,088,902
• 30 Day Avg. Volume: 3,060,961
• PEG Ratio: 1.72
• Price to Book (P/B): 9.06
• Price to Sales (P/S): 2.72
• P/FCF Ratio: 20.02
• Enterprise Value/Market Cap: 0.98
• Enterprise Value/Revenue: 4.00
• Enterprise Value/Gross Profit: 11.79
• Enterprise Value/Ebitda: 17.65
• 1Y Price Target: $587.53
• Price Target Upside: 4.34% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 18
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 76 Outperform
• Price Target: $652.00 ▲(15.79% Upside)

Caterpillar's strong financial performance and positive earnings call are the most significant factors driving the stock score. While technical indicators show bullish momentum, potential overvaluation and high debt levels are notable risks. The company's strategic focus on growth in key segments and mitigating tariff impacts supports a positive outlook.

Positive Factors

Revenue Growth

A 10% increase in sales and revenues to a record $17.6 billion indicates strong market demand and effective business strategies, supporting long-term growth.

Cash Generation

Significant free cash flow generation and shareholder returns demonstrate strong cash management and financial health, ensuring future investment capacity.

Market Position

A growing backlog of $2.4 billion reflects robust demand and a strong market position, indicating sustained future revenue streams.

Negative Factors

High Debt Levels

Despite improvement, a high debt-to-equity ratio indicates reliance on debt financing, which could limit financial flexibility and increase risk.

Tariff Impact

Significant tariff costs impact profit margins and could affect competitive pricing, posing a risk to profitability and market competitiveness.

Regional Sales Decline

Declining sales in Asia Pacific highlight regional market challenges, potentially hindering global revenue diversification and growth.

Caterpillar Business Overview & Revenue Model

Company Description

Caterpillar Inc. (CAT) is a leading American multinational corporation that designs, manufactures, and sells a wide range of machinery and engines, primarily for the construction, mining, and agricultural sectors. Founded in 1925, the company operates through three primary segments: Construction Industries, Resource Industries, and Energy & Transportation. Caterpillar's core products include heavy machinery such as excavators, bulldozers, and backhoes, along with diesel and natural gas engines, and power generation systems. Additionally, the company offers aftermarket services and solutions to enhance customer productivity and equipment longevity.

How the Company Makes Money

Caterpillar generates revenue through several key streams, including the sale of new equipment and engines, aftermarket parts, and repair services. The majority of its revenue comes from the sale of machinery and engines to construction and mining industries, which are cyclical and depend on global economic conditions. The company also benefits from aftermarket services, which provide ongoing revenue through parts, maintenance, and repair services for existing equipment. Furthermore, Caterpillar has established significant partnerships with various firms and governmental entities, enhancing its market presence and providing integrated solutions. Factors contributing to its earnings include global infrastructure investments, commodity prices affecting the mining sector, and technological advancements in equipment efficiency and sustainability.

Caterpillar Financial Statement Overview

Summary

Caterpillar demonstrates strong financial health with robust profitability and cash flow generation. The company has improved its leverage position, although it still relies heavily on debt. Consistent revenue growth and strong margins highlight its competitive position, but high debt levels pose a potential risk.

Income Statement

Caterpillar's income statement shows strong profitability with a consistent gross profit margin around 34% to 36% over recent years. The net profit margin has improved to 14.3% in TTM, indicating efficient cost management. Revenue growth has been positive, albeit modest at 2.4% in TTM, following a slight decline in the previous year. The EBIT and EBITDA margins are robust, reflecting effective operational management.

Balance Sheet

The balance sheet reveals a high debt-to-equity ratio, which has decreased from 2.42 in 2020 to 1.97 in 2024, indicating improved leverage management. Return on equity is strong at 48.2% in TTM, showcasing effective use of equity to generate profits. However, the equity ratio remains low, suggesting a reliance on debt financing.

Cash Flow

Caterpillar's cash flow statement demonstrates solid cash generation with a significant free cash flow growth of 22.5% in TTM. The operating cash flow to net income ratio is stable, indicating good cash conversion. The free cash flow to net income ratio is strong, suggesting efficient capital expenditure management.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	64.67B	64.81B	67.06B	59.43B	50.97B	41.75B
Gross Profit	21.94B	23.32B	23.26B	17.51B	15.00B	12.08B
EBITDA	14.65B	16.04B	15.71B	11.41B	11.04B	6.94B
Net Income	9.26B	10.79B	10.34B	6.71B	6.49B	3.00B
Balance Sheet
Total Assets	93.72B	87.76B	87.48B	81.94B	82.79B	78.32B
Cash, Cash Equivalents and Short-Term Investments	7.54B	6.89B	6.98B	7.00B	9.25B	9.35B
Total Debt	32.28B	38.41B	37.88B	36.99B	37.79B	37.16B
Total Liabilities	73.06B	68.27B	67.97B	66.05B	66.28B	62.95B
Stockholders Equity	20.66B	19.49B	19.49B	15.87B	16.48B	15.33B
Cash Flow
Free Cash Flow	9.48B	8.82B	9.79B	5.17B	4.73B	4.21B
Operating Cash Flow	11.54B	12.04B	12.88B	7.77B	7.20B	6.33B
Investing Cash Flow	-4.48B	-2.45B	-5.87B	-2.54B	-3.08B	-1.49B
Financing Cash Flow	-5.08B	-9.56B	-6.93B	-7.28B	-4.19B	-3.75B

Caterpillar Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 563.10
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• 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 563.1 is above the 20-day moving average (MA) of 542.87, above the 50-day MA of 490.71, and above the 200-day MA of 392.39, indicating a bullish trend. The MACD of 22.35 indicates Positive momentum. The RSI at 61.81 is Neutral, neither overbought nor oversold. The STOCH value of 61.42 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
CAT	76 Outperform	$263.52B	28.89	46.30%	1.04%	-1.51%	-9.69%
PCAR	74 Outperform	$51.83B	19.32	14.15%	4.04%	-15.29%	-42.93%
OSK	71 Outperform	$7.68B	11.84	15.42%	1.59%	-2.28%	-0.53%
DE	66 Neutral	$126.46B	24.46	21.59%	1.38%	-20.63%	-34.82%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
AGCO	59 Neutral	$7.88B	21.03	8.69%	1.42%	-20.09%	121.28%
CNH	56 Neutral	$12.08B	20.41	7.74%	2.59%	-18.10%	-65.24%

Caterpillar Corporate Events

Caterpillar’s Q3 2025: Revenue Growth Amid Profit Challenges

Caterpillar Inc., a leading manufacturer of construction and mining equipment, off-highway diesel and natural gas engines, industrial gas turbines, and diesel-electric locomotives, operates globally through its primary segments: Construction Industries, Resource Industries, and Energy & Transportation. In its third-quarter 2025 earnings report, Caterpillar announced a 10% increase in sales and revenues, reaching $17.6 billion, driven by higher sales volume, particularly in the Energy & Transportation segment. However, the company’s profit per share decreased to $4.88 from $5.06 in the same quarter of the previous year, reflecting an increased effective tax rate and discrete tax charges. The operating profit margin also saw a decline, attributed to unfavorable manufacturing costs and price realization. Despite these challenges, Caterpillar deployed $1.1 billion for dividends and share repurchases, maintaining a strong cash position with $7.5 billion in enterprise cash. Looking ahead, Caterpillar’s management remains optimistic about sustained momentum and long-term profitable growth, supported by a growing backlog and disciplined execution in a dynamic market environment.

Caterpillar’s Earnings Call: Record Sales Amid Tariff Challenges

Caterpillar’s recent earnings call painted a picture of both triumph and challenge. The company celebrated record-breaking sales and revenues, largely fueled by robust demand in the Energy & Transportation sector, alongside an optimistic outlook for 2025. However, the call also highlighted significant hurdles, including the adverse effects of tariffs and declining sales in the Asia Pacific region.

Caterpillar Reports 10% Sales Increase in Q3 2025

Caterpillar Inc. reported a 10% increase in third-quarter 2025 sales and revenues, reaching $17.6 billion, compared to $16.1 billion in the same quarter of 2024. Despite the revenue growth driven by higher equipment sales, the company’s profit per share decreased to $4.88 from $5.06 in the previous year, impacted by a higher estimated global annual effective tax rate and a net discrete tax charge. The company deployed $1.1 billion in cash for dividends and share repurchases, maintaining a strong cash position with $7.5 billion at the end of the quarter.

The most recent analyst rating on (CAT) stock is a Hold with a $485.00 price target. To see the full list of analyst forecasts on Caterpillar stock, see the CAT Stock Forecast page.

Caterpillar Announces New $3.5 Billion Credit Facility

On August 28, 2025, Caterpillar Inc. announced the creation of a new 364-Day revolving credit facility, replacing the previous one, with an aggregate commitment of up to $3.5 billion. This facility, along with amendments to existing Three-Year and Five-Year credit agreements, aims to enhance the company’s financial flexibility for general corporate purposes. The updated agreements extend the expiration dates and provide unsecured revolving credit facilities totaling up to $8 billion. These financial arrangements require Caterpillar to maintain specific financial covenants, including a consolidated net worth of at least $9 billion, ensuring robust financial health and operational capacity.

The most recent analyst rating on (CAT) stock is a Hold with a $447.00 price target. To see the full list of analyst forecasts on Caterpillar stock, see the CAT Stock Forecast page.

Caterpillar Faces Significant Tariff Impact in Q3 2025

Caterpillar Inc. announced that the impact of newly introduced tariffs will significantly affect its financial results for the third quarter and the entirety of 2025. Since the company’s earnings release on August 5, 2025, additional tariffs have been clarified, leading to an expected net impact of $500 million to $600 million for the third quarter and $1.5 to $1.8 billion for the year. Despite these challenges, the company does not anticipate changes to its sales and revenue outlook but expects its full-year adjusted operating profit margin to be near the lower end of its target range. Further updates will be provided in the third-quarter earnings announcement on October 29, 2025.

The most recent analyst rating on (CAT) stock is a Hold with a $447.00 price target. To see the full list of analyst forecasts on Caterpillar stock, see the CAT Stock Forecast page.

Caterpillar Reports Mixed Second-Quarter 2025 Results

Caterpillar Inc., a global leader in manufacturing construction and mining equipment, diesel and natural gas engines, and industrial gas turbines, has released its second-quarter 2025 earnings report. The company operates primarily through its Construction Industries, Resource Industries, and Energy & Transportation segments, and offers financial services through its Financial Products segment.

Caterpillar’s Earnings Call: Optimism Amid Challenges

Caterpillar’s recent earnings call conveyed a mixed sentiment, reflecting both optimism and challenges. The company reported strong backlog growth and increased sales in its Energy & Transportation segment, which signals a positive outlook for the latter half of 2025. However, the decline in overall sales and revenues, exacerbated by significant tariff impacts and regional weaknesses in China and Europe, poses notable challenges.

Caterpillar Reports Q2 2025 Financial Results Decline

Caterpillar Inc. reported its second-quarter 2025 financial results, showing a slight decline in sales and revenues to $16.6 billion, down 1% from the previous year. The decrease was attributed to unfavorable price realization, although it was partially offset by higher sales volumes. The company’s profit per share also decreased from $5.48 in 2024 to $4.62 in 2025. Despite these declines, the company maintained strong operational cash flow and continued to invest in share repurchases and dividends, reflecting its commitment to shareholder returns. The results highlight the company’s resilience in a challenging market environment, supported by robust demand in the Energy & Transportation segment.

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.