Caterpillar (CAT) AI Stock Analysis

• Market Cap: $191.04B
• Dividend Yield: 1.41%
• Average Volume (3M): 3.01M
• Price to Earnings (P/E): 20.7
• Beta (1Y): 1.13
• Revenue Growth: -4.87%
• EPS Growth: -10.47%
• Country: US
• Employees: 112,900
• Sector: Industrials
• Sector Strength: 75
• Industry: Agricultural - Machinery
• EPS (TTM): 4.72
• Shares Outstanding: 468,478,900
• 10 Day Avg. Volume: 3,561,578
• 30 Day Avg. Volume: 3,010,790
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 1.14
• Enterprise Value/Revenue: 3.46
• Enterprise Value/Gross Profit: 10.07
• Enterprise Value/Ebitda: 15.19
• 1Y Price Target: $454.43
• Price Target Upside: 10.13% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 14

• Rating: 69 Neutral
• Price Target: $452.00 ▲(9.54% Upside)

Caterpillar's overall stock score reflects strong financial performance and operational efficiency, tempered by revenue decline and high leverage. Technical indicators show mixed momentum, while valuation suggests potential overvaluation. The positive outlook from the earnings call, driven by backlog growth and demand in key segments, supports a moderately optimistic view despite challenges such as tariffs and regional weaknesses.

Positive Factors

Growth in Power Generation

Power generation sales increased by 28% year-over-year, showcasing strong growth in that segment.

Revenue Opportunities

The deal with Joule Capital Partners could generate $5B in revenue, with an annualized revenue opportunity of ~$1B/year.

Negative Factors

Pricing and Margins

Concerns are raised about deteriorating price and margins, which are key performance indicators.

Tariff Impact

The tariff headwind is shaping up to be larger than expected, impacting long-term profitability.

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 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's financial statements demonstrate strong profitability with a net profit margin of 15.7% and a healthy ROE of 55.0%. However, recent revenue decline and moderate leverage pose potential risks.

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	63.14B	64.81B	67.06B	59.43B	50.97B	41.75B
Gross Profit	21.68B	23.32B	23.26B	17.51B	15.00B	12.08B
EBITDA	14.38B	16.04B	15.71B	11.41B	11.04B	6.94B
Net Income	9.44B	10.79B	10.34B	6.71B	6.49B	3.00B
Balance Sheet
Total Assets	90.33B	87.76B	87.48B	81.94B	82.79B	78.32B
Cash, Cash Equivalents and Short-Term Investments	5.44B	6.89B	6.98B	7.00B	9.25B	9.35B
Total Debt	40.75B	38.41B	37.88B	36.99B	37.79B	37.16B
Total Liabilities	71.66B	68.27B	67.97B	66.05B	66.28B	62.95B
Stockholders Equity	18.66B	19.49B	19.49B	15.87B	16.48B	15.33B
Cash Flow
Free Cash Flow	7.74B	8.82B	9.79B	5.17B	4.73B	4.21B
Operating Cash Flow	11.37B	12.04B	12.88B	7.77B	7.20B	6.33B
Investing Cash Flow	-4.20B	-2.45B	-5.87B	-2.54B	-3.08B	-1.49B
Financing Cash Flow	-5.98B	-9.56B	-6.93B	-7.28B	-4.19B	-3.75B

Caterpillar Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 412.64
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

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 412.64 is below the 20-day moving average (MA) of 423.57, above the 50-day MA of 397.61, and above the 200-day MA of 363.00, indicating a neutral trend. The MACD of 3.54 indicates Positive momentum. The RSI at 45.48 is Neutral, neither overbought nor oversold. The STOCH value of 18.81 is Positive, 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	81 Outperform	$51.58B	16.83	16.77%	4.06%	-11.92%	-38.21%
OSK	78 Outperform	$8.87B	13.91	15.52%	1.40%	0.41%	-3.90%
Sector *	71 Outperform	¥267.71B	14.93	8.32%	2.79%	6.06%	11.03%
DE	70 Outperform	$132.38B	25.55	21.59%	1.30%	-20.63%	-34.82%
AGCO	69 Neutral	$8.38B	84.38	2.42%	1.35%	-24.27%	-76.31%
CAT	69 Neutral	$191.04B	20.74	52.73%	1.41%	-4.87%	-10.47%
CNH	56 Neutral	$15.25B	18.55	10.79%	2.05%	-21.70%	-57.68%

Caterpillar Corporate Events

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.

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.