Caterpillar (CAT) AI Stock Analysis

• Market Cap: $203.62B
• Dividend Yield: 1.33%
• Average Volume (3M): 2.50M
• Price to Earnings (P/E): 21.1
• Beta (1Y): 1.11
• Revenue Growth: -5.58%
• EPS Growth: -7.37%
• Country: US
• Employees: 112,900
• Sector: Industrials
• Sector Strength: 93
• Industry: Agricultural - Machinery
• EPS (TTM): 4.25
• Shares Outstanding: 470,314,970
• 10 Day Avg. Volume: 2,488,258
• 30 Day Avg. Volume: 2,501,332
• PEG Ratio: -2.94
• Price to Book (P/B): 11.38
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 23.72
• Enterprise Value/Market Cap: 1.17
• Enterprise Value/Revenue: 1.30
• Enterprise Value/Gross Profit: 17.48
• Enterprise Value/Ebitda: 8.33
• 1Y Price Target: $417.93
• Price Target Upside: -2.82% Downside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 14

• Rating: 70 Outperform
• Price Target: $438.00 ▲(1.85%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

Earnings Potential

The market is putting high earnings multiples on GE Vernova's EPS, and there is a 30% upside to CAT shares using a 17 PE.

Infrastructure and Reshoring

CAT remains a Top Pick for 2025 as it plays on global infrastructure and reshoring trends.

Structural 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

Construction OEM Challenges

Analysts remain cautious on Construction OEM's heading into the 2H of the year, indicating potential challenges ahead.

Dealer Inventories

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

Earnings Revisions Risk

There is a very real risk that the expected meaningful 2H25 improvement could lead to negative earnings revisions.

Caterpillar Business Overview & Revenue Model

Company Description

Caterpillar Inc. manufactures and sells construction and mining equipment, diesel and natural gas engines, and industrial gas turbines worldwide. Its Construction Industries segment offers asphalt pavers, backhoe loaders, compactors, cold planers, compact track and multi-terrain loaders, excavators, motorgraders, pipelayers, road reclaimers, site prep tractors, skid steer loaders, telehandlers, and utility vehicles; mini, small, medium, and large excavators; compact, small, and medium wheel loaders; track-type tractors and loaders; and wheel excavators. The Resource Industries segment provides electric rope shovels, draglines, hydraulic shovels, rotary drills, hard rock vehicles, track-type tractors, mining trucks, longwall miners, wheel loaders, off-highway trucks, articulated trucks, wheel tractor scrapers, wheel dozers, fleet management, landfill compactors, soil compactors, machinery components, autonomous ready vehicles and solutions, select work tools, and safety services and mining performance solutions. The Energy & Transportation segment offers reciprocating engines, generator sets, integrated systems and solutions, turbines and turbine-related services, remanufactured reciprocating engines and components, centrifugal gas compressors, diesel-electric locomotives and components, and other rail-related products and services for marine, oil and gas, industrial, and electric power generation sectors. The company's Financial Products segment provides operating and finance leases, installment sale contracts, working capital loans, and wholesale financing plans; and insurance and risk management products for vehicles, power generation facilities, and marine vessels. The All Other operating segment manufactures filters and fluids, undercarriage, ground engaging tools, etc. The company was formerly known as Caterpillar Tractor Co. and changed its name to Caterpillar Inc. in 1986. The company was founded in 1925 and is headquartered in Deerfield, Illinois.

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 margins and effective cash management. However, the recent decline in revenue growth and moderate leverage are concerns that need monitoring.

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

Caterpillar Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 430.05
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: Negative

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 430.05 is above the 20-day moving average (MA) of 410.32, above the 50-day MA of 378.09, and above the 200-day MA of 360.66, indicating a bullish trend. The MACD of 15.96 indicates Negative momentum. The RSI at 75.31 is Negative, neither overbought nor oversold. The STOCH value of 87.37 is Negative, 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
PCAR	83 Outperform	$52.83B	17.26	16.77%	3.93%	-11.90%	-38.21%
OSK	77 Outperform	$8.34B	13.83	15.24%	1.50%	5.95%	-10.59%
DE	72 Outperform	$138.27B	24.70	24.07%	1.24%	-22.26%	-37.83%
CAT	70 Outperform	$203.62B	21.10	55.67%	1.33%	-5.58%	-7.37%
Sector *	58 Neutral	HK$14.89B	4.69	-2.78%	5.83%	3.80%	-54.55%
AGCO	58 Neutral	$8.20B	46.40	-13.60%	1.08%	-23.02%	-152.78%
CNH	56 Neutral	$16.23B	15.64	13.26%	1.95%	-21.99%	-52.11%

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.