Caterpillar (CAT) AI Stock Analysis

• Market Cap: $150.05B
• Dividend Yield: 1.8%
• Average Volume (3M): 3.28M
• Price to Earnings (P/E): 15.3
• Beta (1Y): 1.11
• Revenue Growth: -5.58%
• EPS Growth: -7.37%
• Country: US
• Employees: 112,900
• Sector: Industrials
• Sector Strength: 78
• Industry: Agricultural - Machinery
• EPS (TTM): 20.52
• Shares Outstanding: 477,932,040
• 10 Day Avg. Volume: 2,538,809
• 30 Day Avg. Volume: 3,280,464
• PEG Ratio: 1.46
• Price to Book (P/B): N/A
• Price to Sales (P/S): 0.00
• Price to Cash Flow (P/CF): 0.00
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: 1.38
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: 8.88
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $344.69
• Price Target Upside: 6.49% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 14

Caterpillar's overall stock score is driven by solid financial performance and attractive valuation. However, technical indicators suggest caution due to potential downward pressure. The earnings call depicted a mixed outlook with strategic strengths and market challenges. Maintaining revenue growth and managing operational costs will be critical for future performance.

Positive Factors

Backlog

CAT's backlog increased to $35bn, an all-time record.

Corporate Governance

Splitting Chairman & CEO is positive corporate governance.

Profit Performance

Caterpillar reported a record full-year adjusted profit per share, increasing more than sixfold during the CEO's tenure.

Negative Factors

Competitive Market

Domestic construction equipment market is becoming increasingly more competitive.

Sales and Earnings Forecast

Sales, margins, and segment profit came in below expectations across the three segments, and guidance implies below consensus EPS for 2025.

Tariff Impact

The additional tariff cost headwind is $250-350mn in Q2 (may step up in 2H if no relief).

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 generates revenue primarily through the sale and leasing of machinery and engines, as well as providing related parts and services. The company's key revenue streams include the Construction Industries segment, which offers heavy construction equipment; the Resource Industries segment, supplying equipment for mining and quarrying; and the Energy & Transportation segment, which provides engines and turbines for various applications. Additionally, Caterpillar's Financial Products division contributes through financing solutions that support customer purchases and leases of Caterpillar equipment. The company also benefits from its global dealer network, which enhances market reach and customer service, and strategic partnerships that expand its technological capabilities and market presence.

Caterpillar Financial Statement Overview

Summary

Caterpillar demonstrates solid financial health with strong cash flow and a robust equity base. However, the stagnation in net income in 2024 requires attention, as it affects overall profitability metrics. The company's ability to maintain revenue growth amidst industry challenges is commendable, but careful management of liabilities and operational costs will be crucial for sustaining long-term growth.

Income Statement

Caterpillar's income statement reflects stable performance in the industrial machinery sector. The gross profit margin is robust, indicating effective cost management. The net profit margin, while positive in previous years, dropped to zero in 2024, signaling potential challenges in cost or expense management. Revenue growth over the years is positive, showing the company's ability to increase sales in a competitive market. EBIT and EBITDA margins indicate stable operational efficiency, albeit with room for improvement.

Balance Sheet

Caterpillar's balance sheet reveals a solid equity base with a moderate debt-to-equity ratio, suggesting a balanced approach to leveraging. The return on equity indicates effective utilization of shareholder funds, although there is a decline in equity ratio over time, highlighting increased liabilities. Overall, the company maintains a stable asset base, but growing liabilities could pose future risks.

Cash Flow

The cash flow statement for Caterpillar shows strong operating cash flow, supporting the company's ability to generate cash from its operations. Free cash flow has grown over the years, which is a positive indicator for future investments and shareholder returns. The operating cash flow to net income ratio is favorable, though the free cash flow to net income ratio reflects some volatility, impacted by recent net income challenges.

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
	EBIT
13.07B	12.97B	7.90B	6.88B	4.55B
	EBITDA
16.04B	15.71B	11.97B	10.63B	7.27B
	Net Income Common Stockholders
10.79B	10.34B	6.71B	6.49B	3.00B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
6.89B	6.98B	7.00B	9.25B	9.35B
	Total Assets
87.76B	87.48B	81.94B	82.79B	78.32B
	Total Debt
38.41B	37.88B	36.99B	37.79B	37.16B
	Net Debt
31.52B	30.90B	29.99B	28.54B	27.81B
	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: Neutral
• Last Price: 323.68
• 50DMA: Positive
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CAT, the sentiment is Neutral. The current price of 323.68 is above the 20-day moving average (MA) of 296.70, above the 50-day MA of 320.07, and below the 200-day MA of 354.76, indicating a neutral trend. The MACD of -1.75 indicates Negative momentum. The RSI at 59.69 is Neutral, neither overbought nor oversold. The STOCH value of 87.89 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for CAT.

Caterpillar Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
OSK	73 Outperform	$5.56B	8.31	15.24%	2.18%	5.95%	-10.59%
CAT	72 Outperform	$150.05B	15.30	55.67%	1.80%	-5.58%	-7.37%
CNH	70 Outperform	$15.48B	12.54	13.21%	3.79%	-21.99%	-52.11%
DE	70 Outperform	$130.73B	21.35	27.91%	1.29%	-20.93%	-34.33%
PCAR	67 Neutral	$47.49B	11.45	19.90%	1.37%	-8.65%	-31.57%
Sector *	64 Neutral	$4.28B	11.80	5.30%	250.74%	4.12%	-9.02%
AGCO	55 Neutral	$6.97B	46.40	-13.60%	1.24%	-23.02%	-152.78%

Caterpillar Corporate Events

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.

Spark’s Take on CAT Stock

According to Spark, TipRanks’ AI Analyst, CAT is a Outperform.

Caterpillar’s overall stock score reflects a strong financial foundation and attractive valuation, offset by technical indicators suggesting caution. The record adjusted profit and strong free cash flow are significant positives, but decreased sales and challenges in certain segments highlight potential risks. The company’s ability to sustain revenue growth, manage costs, and leverage its strong backlog will be critical for future performance.

To see Spark’s full report on CAT stock, click here.

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.

Spark’s Take on CAT Stock

According to Spark, TipRanks’ AI Analyst, CAT is a Neutral.

Caterpillar’s stock is supported by strong financial health and a reasonable valuation, yet faces challenges in sales and revenue growth, as highlighted in the latest earnings call. The technical analysis indicates a bearish trend, adding caution to the outlook. The company’s ability to navigate these challenges while leveraging its strong cash flow and service revenue growth will be key to future performance.

To see Spark’s full report on CAT stock, click here.

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.

Spark’s Take on CAT Stock

According to Spark, TipRanks’ AI Analyst, CAT is a Neutral.

Caterpillar’s overall stock score is moderated by a combination of strong financial health and cash flow alongside challenges in sales and revenue growth. Technical analysis indicates a bearish trend, but valuation remains fair, offering potential upside if future earnings improve. The earnings call underscores both achievements and challenges, with a focus on maintaining profitability amidst market pressures.

To see Spark’s full report on CAT stock, click here.