Caterpillar (CAT)
NYSE:CAT
Top Page
Caterpillar
(NYSE:CAT)
Select Model
Select Model
Rating:75Outperform
Price Target:
$823.00
â–²(13.60% Upside)
Action:ReiteratedDate:01/30/26
CAT scores well on fundamentals and trend: strong profitability and free cash flow, plus clear bullish technical positioning above key moving averages. The main offsets are expensive valuation (high P/E and low yield) and earnings-call risks centered on rising tariffs and margin compression despite strong backlog-driven visibility.
Positive Factors
Strong free cash flow generation
Consistent multi‑billion free cash flow provides durable flexibility to fund capital expenditures, R&D, dealer inventory support, and sizable shareholder returns. Strong operating cash flow (~$11.7B TTM) underpins investments and balance‑sheet resilience across cycles, despite some FCF volatility.
Negative Factors
Rising tariff headwinds
Material and rising tariff costs represent a structural, external headwind that compresses margins by hundreds of basis points unless offset by pricing or supply changes. The expected ~$2.6B incremental tariff in 2026 directly reduces operating profit and forces trade‑offs between margin, pricing and market share.
Read all positive and negative factors
Positive Factors
Negative Factors
Strong free cash flow generation
Consistent multi‑billion free cash flow provides durable flexibility to fund capital expenditures, R&D, dealer inventory support, and sizable shareholder returns. Strong operating cash flow (~$11.7B TTM) underpins investments and balance‑sheet resilience across cycles, despite some FCF volatility.
Read all positive factors
Caterpillar (CAT) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$337.07B
Dividend Yield0.98%
Average Volume (3M)2.67M
Price to Earnings (P/E)30.1
Beta (1Y)1.09
Revenue Growth-1.51%
EPS Growth-9.69%
CountryUS
Employees112,900
SectorIndustrials
Sector Strength72
IndustryAgricultural - Machinery
Share Statistics
EPS (TTM)5.16
Shares Outstanding465,287,320
10 Day Avg. Volume2,599,471
30 Day Avg. Volume2,669,844
Financial Highlights & Ratios
PEG Ratio-2.04
Price to Book (P/B)12.54
Price to Sales (P/S)3.95
P/FCF Ratio26.01
Enterprise Value/Market Cap1.10
Enterprise Value/Revenue5.51
Enterprise Value/Gross Profit17.04
Enterprise Value/Ebitda25.06
Forecast
1Y Price Target
$743.18Price Target Upside2.59% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering17
EPS Forecast (FY)22.96
Revenue Forecast (FY)$74.00B
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,...
How the Company Makes Money
Caterpillar generates revenue through multiple key streams, primarily from the sale of machinery and equipment, which constitutes the largest portion of its income. The company also earns substantial revenue from its parts and service business, pr...
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 Earnings Call Summary
Earnings Call Date:Jan 29, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:Apr 23, 2026
Earnings Call Sentiment Positive
The call highlighted multiple strong operational and financial wins — record annual and quarterly revenue, a record $51 billion backlog, robust free cash flow ($9.5B), meaningful power & energy momentum, growing services and autonomy deployments, and sizable returns to shareholders. Offsetting these positives are sizable and growing tariff headwinds (incremental tariffs expected to rise to ~$2.6B in 2026), notable margin compression year‑over‑year (driven largely by tariffs and higher costs), segment margin declines in Construction and Resource Industries, and capacity/timing constraints that temper immediate upside. On balance, the positive operating and cash performance along with strong order/backlog momentum outweigh the near‑term margin and tariff challenges, but execution on capacity expansions and tariff mitigation will be key to sustaining the outlook.Positive Updates
Record Annual and Quarterly Revenue
Full-year sales and revenues of $67.6 billion (highest in company history), up 4% year‑over‑year; fourth‑quarter sales and revenues of $19.1 billion, up 18% year‑over‑year and a single‑quarter record.
Negative Updates
Significant Tariff Headwinds
New tariffs in 2025 had an absolute value of ~$1.8 billion with net incremental tariff impact of ~$1.7 billion after mitigation; company expects incremental tariff costs of ~ $2.6 billion in 2026 (about $800 million higher than 2025) and roughly $800 million of incremental tariffs in Q1 2026 — a meaningful drag on profitability.
Read all updates
Q4-2025 Updates
Positive
Negative
Record Annual and Quarterly Revenue
Full-year sales and revenues of $67.6 billion (highest in company history), up 4% year‑over‑year; fourth‑quarter sales and revenues of $19.1 billion, up 18% year‑over‑year and a single‑quarter record.
Read all positive updates
Company Guidance
Caterpillar guided 2026 to enterprise sales growth around the top end of its 5–7% long‑term CAGR target, with sales up across all three primary segments (Power & Energy expected to grow fastest), roughly 62% of the record $51 billion backlog slated to deliver in the next 12 months, and about 2% of total sales from favorable price realization. Full‑year adjusted operating profit margin is expected to exceed 2025’s ~17% but remain near the bottom of the target range (excluding incremental tariffs the margin would be in the top half); incremental tariff costs are forecast at about $2.6 billion for 2026 (versus a $1.7 billion net incremental tariff in 2025) with roughly $800 million of tariffs expected in Q1 (Q1 tariff impact split ~50% Construction, 20% Resource, 30% Power & Energy). Management expects ~ $3.5 billion of capital expenditures, MP&E free cash flow slightly below 2025’s $9.5 billion, a ~23% effective tax rate (ex‑discretes), $300–350 million of restructuring costs, and a normal Q1 dealer inventory build in excess of $1 billion supporting near‑term sales.Caterpillar Financial Statement Overview
Summary
Income Statement
83
Very Positive
Balance Sheet
72
Positive
Cash Flow
78
Positive
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 67.59B | 64.81B | 67.06B | 59.43B | 50.97B |
| Gross Profit | 21.86B | 23.32B | 23.26B | 17.51B | 15.00B |
| EBITDA | 14.86B | 16.04B | 15.71B | 11.41B | 11.04B |
| Net Income | 8.87B | 10.79B | 10.34B | 6.71B | 6.49B |
Balance Sheet | |||||
| Total Assets | 98.58B | 87.76B | 87.48B | 81.94B | 82.79B |
| Cash, Cash Equivalents and Short-Term Investments | 9.98B | 6.89B | 6.98B | 7.00B | 9.25B |
| Total Debt | 43.33B | 38.41B | 37.88B | 36.99B | 37.79B |
| Total Liabilities | 77.27B | 68.27B | 67.97B | 66.05B | 66.28B |
| Stockholders Equity | 21.32B | 19.49B | 19.49B | 15.87B | 16.48B |
Cash Flow | |||||
| Free Cash Flow | 10.27B | 8.82B | 9.79B | 5.17B | 4.73B |
| Operating Cash Flow | 11.74B | 12.04B | 12.88B | 7.77B | 7.20B |
| Investing Cash Flow | -4.71B | -2.45B | -5.87B | -2.54B | -3.08B |
| Financing Cash Flow | -3.90B | -9.56B | -6.93B | -7.28B | -4.19B |
Caterpillar Technical Analysis
Positive
724.44
Price Trends
712.73
Positive
651.14
Positive
549.96
Positive
Market Momentum
0.55
Negative
53.57
Neutral
77.36
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 724.44 is above the 20-day moving average (MA) of 703.47, above the 50-day MA of 712.73, and above the 200-day MA of 549.96, indicating a bullish trend. The MACD of 0.55 indicates Negative momentum. The RSI at 53.57 is Neutral, neither overbought nor oversold. The STOCH value of 77.36 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive 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 3 New Risks
1.
Financial risks Q4, 2025
2.
Operational risks Q4, 2025
3.
Macroeconomic risks Q4, 2025
Caterpillar Peers Comparison
UnderperformOutperform
Sector (63)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
75 Outperform | $337.07B | 30.12 | 45.10% | 0.98% | -1.51% | -9.69% | |
73 Outperform | $155.34B | 54.83 | 18.93% | 1.34% | -11.66% | -27.80% | |
72 Outperform | $62.16B | 24.25 | 12.57% | 3.83% | -15.29% | -42.93% | |
66 Neutral | $8.28B | 10.68 | 17.36% | 1.10% | -20.09% | 121.28% | |
66 Neutral | $9.18B | 12.46 | 14.57% | 1.56% | -2.28% | -0.53% | |
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% | |
56 Neutral | $13.28B | 22.56 | 6.58% | 2.67% | -18.10% | -65.24% |
* Industrials Sector Average
CAT
Caterpillar
724.44
454.22
168.09%
AGCO
Agco
114.37
39.37
52.49%
CNH
CNH Industrial
10.70
0.57
5.63%
DE
Deere
576.00
168.35
41.30%
OSK
Oshkosh
146.69
68.79
88.31%
PCAR
Paccar
118.20
33.96
40.32%
Caterpillar Corporate Events
Business Operations and StrategyStock BuybackDividendsFinancial Disclosures
Caterpillar Posts Record 2025 Sales Despite Margin Compression
Positive
Jan 29, 2026
On January 29, 2026, Caterpillar reported record fourth-quarter and full-year 2025 results, with sales and revenues climbing 18% year-on-year in the fourth quarter to $19.1 billion and 4% for the full year to an all-time high of $67.6 billion, dri...
Executive/Board Changes
Caterpillar announces board leadership transition and governance changes
Neutral
Jan 6, 2026
On January 6, 2026, Caterpillar’s board announced that Executive Chairman and former CEO D. James Umpleby III will retire from the board effective April 1, 2026, after a 45-year career with the company, and that current CEO Joseph E. Creed w...
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.