Upside case
Bull case
$2029+124.3%
CAT would need investors to value it at roughly 88x earnings — about 49x more generous than today's 39x forward P/E. That requires meaningful multiple expansion on top of continued earnings growth.
Analysis OverviewBuyUpdated May 1, 2026
Caterpillar Inc. (CAT) Stock Analysis
Wall Street verdict, consensus price target, and analyst rating breakdown — everything needed to frame the risk/reward at today's price.
Analyst consensus
Buy
Covering
53
analysts
25 bullish · 7 bearish · 53 covering CAT
Strong Buy
0
Buy
25
Hold
21
Sell
7
Strong Sell
0
Consensus Target
$825
-8.8% vs today
Scenario Range
$240 – $2029
Model bear to bull value window
Coverage
53
Published analyst ratings
Valuation Context
39.2x
Forward P/E · Market cap $420.9B
CAT price targets
Three scenarios for where CAT stock could go
Current
~$905
Confidence
59 / 100
Updated
May 1, 2026
Where we are now
Current · $905
Bear
$240
Base
$1263
Bull
$2029
Market caseClosest to today
Base case
$1263+39.6%
At 55x on FY1 earnings, the base case reflects a reasonable but not stretched valuation. It prices in continued growth without assuming an exceptional setup.
Stress case
Bear case
$240-73.4%
If investor confidence fades or macro conditions deteriorate, a 29x multiple contraction could push CAT down roughly 73% from where it trades now.
Not financial advice. Model confidence reflects internal scenario assumptions, not a guarantee of returns. Past performance does not predict future results.
Caterpillar Inc.
CAT · NYSEIndustrialsAgricultural - MachineryDecember year-end
Caterpillar is a global manufacturer of heavy machinery for construction, mining, and energy industries. It makes money primarily through equipment sales—with construction machinery (~40%), resource/mining equipment (~25%), and energy/transportation systems (~30%)—plus parts and services. Its competitive advantage lies in its massive global dealer network, brand reputation for durability, and extensive aftermarket parts ecosystem that creates recurring revenue.
Market Cap
$420.9B
Revenue TTM
$70.8B
Net Income TTM
$9.4B
Net Margin
13.3%
CAT Revenue and Earnings Performance
Quarterly beat-or-miss track record against analyst estimates, plus forward revenue and EPS outlook for the next two fiscal years.
EPS Beat Rate
75%Exceptional
12 quarters tracked
Revenue Beat Rate
50%Exceptional
vs consensus estimates
Avg EPS Surprise
+7.8%
above Street consensus
Beat / Miss Record
BeatMissLeft = EPS · Right = Revenue
Q3 2025
Q4 2025
Q1 2026
Q2 2026
Last 4 Quarters
EPS beats: 3 of 4Q3 2025
EPS
$4.72/$4.89
Revenue
$16.6B/$16.3B
Q4 2025
EPS
$4.95/$4.53
Revenue
$17.6B/$16.8B
Q1 2026
EPS
$5.16/$4.71
Revenue
$19.1B/$17.9B
Q2 2026
EPS
$5.54/$4.65
Revenue
$17.4B/$16.5B
| Quarter | EPS (Actual / Est) | EPS Surprise | Revenue (Actual / Est) | Rev Surprise |
|---|---|---|---|---|
| Q3 2025 | $4.72/$4.89 | -3.5% | $16.6B/$16.3B | +1.6% |
| Q4 2025 | $4.95/$4.53 | +9.3% | $17.6B/$16.8B | +5.2% |
| Q1 2026 | $5.16/$4.71 | +9.6% | $19.1B/$17.9B | +7.2% |
| Q2 2026 | $5.54/$4.65 | +19.1% | $17.4B/$16.5B | +5.4% |
FY1–FY2 Estimates
Revenue Outlook
FY1
$74.4B
+5.2% YoY
FY2
$79.4B
+6.6% YoY
EPS Outlook
FY1
$22.93
+13.4% YoY
FY2
$26.29
+14.6% YoY
Trailing FCF (TTM)$11.4B
FCF Margin: 16.2%
Next Earnings
—
Expected EPS
—
Expected Revenue
—
CAT beat EPS estimates in 3 of 4 tracked quarters. A strong delivery record supports forward estimate credibility.
CAT Revenue Breakdown by Segment
Product and geographic revenue mix from the latest annual disclosure, with year-over-year growth by segment.
Latest disclosure
FY 2025
Total disclosed revenue $111.0B
Product Mix
Latest annual revenue by segment or product family
Reportable Subsegments
66.6%
YoY unavailable
Tap, hover, or focus a slice to inspect segment detail.
Geographic Mix
Latest annual revenue by reported region
North America
54.2%
+6.4% YoY
Tap, hover, or focus a slice to inspect segment detail.
Reportable Subsegments is the largest disclosed segment at 66.6% of FY 2025 revenue, with no year-over-year comparison yet.
North America is the largest reported region at 54.2%, up 6.4% YoY.
CAT Valuation Snapshot
Current multiples compared to the S&P 500, the company's sector, and its own five-year average.
Relative Value Signal
Significantly Overvalued
Fair value est. $488 — implies -45.1% from today's price.
Premium to Fair Value
45.1%
above fair value
Deep DiscountFair ValueVery Expensive
vs S&P 500 Trailing P/E
CAT
48.0x
vs
S&P 500
25.1x
+91% premium
vs Industrials Trailing P/E
CAT
48.0x
vs
Industrials
25.7x
+87% premium
vs CAT 5Y Avg P/E
Today
48.0x
vs
5Y Average
19.6x
+145% premium
Forward PE
39.2x
S&P 500
19.1x
+105%
Industrials
20.7x
+89%
5Y Avg
—
—
Trailing PE
48.0x
S&P 500
25.1x
+91%
Industrials
25.7x
+87%
5Y Avg
19.6x
+145%
PEG Ratio
1.71x
S&P 500
1.72x
-0%
Industrials
1.64x
+4%
5Y Avg
—
—
EV/EBITDA
33.7x
S&P 500
15.2x
+122%
Industrials
13.7x
+147%
5Y Avg
15.8x
+113%
Price/FCF
41.0x
S&P 500
21.1x
+94%
Industrials
21.2x
+94%
5Y Avg
22.1x
+86%
Price/Sales
6.2x
S&P 500
3.1x
+99%
Industrials
1.6x
+293%
5Y Avg
2.7x
+133%
Dividend Yield
0.65%
S&P 500
1.87%
-65%
Industrials
1.27%
-49%
5Y Avg
1.64%
-60%
| Metric | CAT | S&P 500 | Industrials | 5Y Avg CAT |
|---|---|---|---|---|
| Forward PE | 39.2x | 19.1x+105% | 20.7x+89% | — |
| Trailing PE | 48.0x | 25.1x+91% | 25.7x+87% | 19.6x+145% |
| PEG Ratio | 1.71x | 1.72x | 1.64x | — |
| EV/EBITDA | 33.7x | 15.2x+122% | 13.7x+147% | 15.8x+113% |
| Price/FCF | 41.0x | 21.1x+94% | 21.2x+94% | 22.1x+86% |
| Price/Sales | 6.2x | 3.1x+99% | 1.6x+293% | 2.7x+133% |
| Dividend Yield | 0.65% | 1.87% | 1.27% | 1.64% |
CAT trades above S&P 500 benchmarks on 5 of 6 measured multiples — commands a broad premium across most valuation dimensions.
Forward P/E and PEG reflect analyst consensus estimates. Historical averages use trailing ratios where forward data is unavailable.S&P 500 and sector benchmarks both use trailing median P/E — similar readings indicate the broader index and sector are priced alike.
Open valuation toolCAT Financial Health
Verdict
Exceptional
CAT generates $11.4B in free cash flow at a 16.2% margin — 15.9% ROIC signals a durable competitive advantage · returns 1.9% of market cap to shareholders annually.
Cash Engine
Revenue, margins, and cash generation
Revenue (TTM)
Trailing-twelve-month sales base
$70.8B
Revenue Growth
TTM vs prior year
+11.8%
Gross Margin
Gross profit as a share of revenue
32.5%
Operating Margin
Operating income divided by revenue
16.6%
Net Margin
Net income divided by revenue
13.3%
EPS (TTM)
Diluted earnings per share, trailing twelve months
$20.22
Free Cash Flow (TTM)
Cash generation after capex
$11.4B
FCF Margin
FCF as share of revenue — the primary cash quality signal
16.2%
Capital Quality
ROIC, leverage, and debt serviceability
ROIC
Return on invested capital — primary competitive quality signal
15.9%
ROA
Return on assets, trailing twelve months
10.0%
Cash & Equivalents
Liquid assets on the balance sheet
$10.0B
Net Debt
Total debt minus cash
$33.4B
Debt Serviceability
Net debt as a multiple of annual free cash flow
2.9× FCF
~2.9 years to full repayment at current FCF run-rate
ROE *
Return on equity, trailing twelve months
47.5%
* Elevated by buyback-compressed equity — compare ROIC (15.9%) for an undistorted picture of capital efficiency.
Shareholder Returns
How capital is returned to owners
Total shareholder yield
1.9%
Dividend
0.6%
Buyback
1.2%
Share Repurchases
Trailing buyback outflow — dollar magnitude of capital returned
$5.2B
Dividend / Share
Annualized trailing dividend per share
$5.86
Payout Ratio
Share of earnings distributed as dividends
31.0%
Shares Outstanding
Declining as buybacks retire shares
465M
All figures from the trailing twelve months. ROIC uses invested capital (equity + net debt). ROE marked * where buyback-compressed equity base may inflate the figure.
Open full ratios pageCAT Stock Risk Factors
Key factors that could pressure the stock price, compress the multiple, or weigh on future results.
AI analysis · updated April 11, 2026
High Risk
Tariff‑Induced Margin Compression
Net incremental tariff headwinds of approximately $1.7 B in 2025 and projected $2.6 B in 2026 have already eroded operating profit margins. If price increases cannot offset these costs, profitability could decline sharply.
High Risk
Trade Policy & Regulatory Headwinds
U.S. Senators are scrutinizing Caterpillar’s offshoring practices, and potential targeted tariffs on imports could impose additional costs. Such regulatory uncertainty could further compress margins and disrupt supply chains.
Medium
Earnings Quality Deterioration
Net income growth has outpaced operating cash flow growth, signaling a decline in earnings quality. This divergence may attract accounting scrutiny and lead to a valuation de‑rating.
Medium
Intensifying Competitive Pressure
Competitors like Deere & Company and Komatsu are gaining market share in North America, eroding Caterpillar’s pricing power. This could reduce gross margins and limit revenue growth.
Medium
Valuation Sustainability Concerns
Caterpillar’s P/E ratio is significantly above its historical average, reflecting a “rich” valuation. If growth assumptions are not met, the stock could experience a sharp correction.
These are risk mechanisms, not predictions. The key question is which would force a cut to earnings estimates or a lower multiple than the market currently prices in.
Why CAT Stock Could Outperform
Structural drivers behind the upside case and why the stock could outperform over the next 12 months.
AI analysis · updated April 11, 2026
Sector Diversification Fuels Growth
Caterpillar benefits from rising demand across construction, resource, and energy & transportation segments. Multi‑year infrastructure spending and data‑center construction support the Construction Industries unit, while the global energy transition drives demand for copper, nickel, and lithium in the Resource Industries unit. The Energy & Transportation unit is expanding power‑generation contracts for AI data centers.
Record‑Setting Order Backlog Provides Visibility
The company exited 2025 with a $51 billion backlog, up 71% year‑over‑year. A substantial portion of this backlog is expected to convert into revenue within the next 12 months, giving Caterpillar strong revenue predictability.
Shift to Higher‑Margin Recurring Services
Caterpillar is acquiring mining software firms and digitizing equipment for predictive maintenance, moving toward recurring revenue. It targets $30 billion in annual services sales by 2030, which will lift margins and reduce cyclicality.
Robust Financials and Shareholder Returns
Caterpillar maintains strong profitability and margins through cost management and brand loyalty. It is a Dividend Aristocrat with 30 consecutive years of dividend increases and actively returns capital via share buybacks.
Industry‑Leading Brand and Economic Moat
As the world’s leading construction and mining equipment manufacturer, Caterpillar enjoys a strong brand, reliable products, and low total cost of ownership. This positions it with a wide economic moat and a compelling value proposition.
A real bull case compounds — each driver matters most when it strengthens margins, supports capital returns, and keeps the company above the market's minimum growth bar simultaneously.
CAT Stock Price Performance
52-week range context and price returns across multiple time horizons. Dividend contribution is shown separately in the Capital Return section.
Current Price
$904.59
52W Range Position
99%
52-Week Range
Current price plotted between the 52-week low and high.
52-Week Low
$318.11
+184.4% from the low
52-Week High
$908.90
-0.5% from the high
1 Month
+25.42%
3 Month
+33.36%
YTD
+51.2%
1 Year
+180.0%
3Y CAGR
+61.4%
5Y CAGR
+30.6%
10Y CAGR
+28.7%
Range context matters because valuation compression and earnings misses rarely hit from the same starting point. A stock already far below its high can still fall, but it is no longer carrying the same embedded optimism as one pressing a fresh peak.
CAT vs Peers
Valuation, growth, and margin comparison against the closest publicly traded peers for this company.
Peer Set
Accurate peer set
Forward PE
39.2x
vs 24.9x median
+58% above peer median
Revenue Growth
+5.2%
vs -3.8% median
+238% above peer median
Net Margin
13.3%
vs 7.9% median
+69% above peer median
| Company | Mkt Cap | Fwd PE | Rev Grw | Margin | Rating | Upside |
|---|---|---|---|---|---|---|
CAT CAT Caterpillar Inc. | $420.9B | 39.2x | +5.2% | 13.3% | Buy | -8.8% |
DE DE Deere & Company | $156.1B | 32.3x | -6.5% | 8.9% | Hold | +18.2% |
CNH CNH CNH Industrial N.V. | $12.8B | 24.9x | -4.3% | 2.1% | Buy | +28.4% |
AGC AGCO AGCO Corporation | $8.3B | 19.8x | -3.8% | 7.4% | Buy | +11.1% |
PCA PCAR PACCAR Inc | $59.7B | 19.8x | -1.6% | 9.1% | Hold | +9.8% |
CMI CMI Cummins Inc. | $93.3B | 25.6x | +4.6% | 7.9% | Buy | -8.0% |
This peer comparison reflects companies with similar business models, product lines, or market positioning, supplemented by industry grouping when direct matches are limited.
CAT Dividend and Capital Return
CAT returns capital mainly through $5.2B/year in buybacks (1.2% buyback yield), with a modest 0.65% dividend — combining for 1.9% total shareholder yield. The dividend has grown for 12 consecutive years.
Dividend SustainableFCF Well Covered
Total Shareholder Yield
1.9%
Dividend + buyback return per year
Buyback Yield
1.2%
Dividend Yield
0.65%
Payout Ratio
31.0%
How CAT Splits Its Return
Div 0.65%
Buyback 1.2%
Dividend 0.65%Buybacks 1.2%
Dividend Profile
Yield, cadence, and growth quality
Dividend / Share
Trailing annualized cash dividend
$5.86
Growth Streak
Consecutive years of dividend increases
12Y
3Y Div CAGR
8.1%
5Y Div CAGR
7.2%
Ex-Dividend Date
—
Payment Cadence
Quarterly
4 payments over the last 12 months
Buyback Engine
How much per-share support comes from repurchases
Repurchases (TTM)
Cash used for buybacks in the latest trailing period
$5.2B
Estimated Shares Retired
6M
Approx. Share Reduction
1.2%
Shares Outstanding
Current diluted share count from the screening snapshot
465M
At 1.2%/year, buybacks mechanically lift EPS even with flat earnings — each remaining share represents a slightly larger piece of the company.
| Year | Div / Share | YoY Grw | BB Yield | Total Yield |
|---|---|---|---|---|
| 2026 | $3.02 | — | — | — |
| 2025 | $5.84 | +7.7% | 1.9% | 3.0% |
| 2024 | $5.42 | +8.4% | 4.3% | 5.8% |
| 2023 | $5.00 | +8.2% | 3.3% | 5.0% |
| 2022 | $4.62 | +7.9% | 3.3% | 5.2% |
FAQ
7 questionsCAT Investor Questions
Common questions answered from live analyst data and company financials.
01Is Caterpillar Inc. (CAT) stock a buy or sell in 2026?
Caterpillar Inc. (CAT) is rated Buy by Wall Street analysts as of 2026. Of 53 analysts covering the stock, 25 rate it Buy or Strong Buy, 21 rate it Hold, and 7 rate it Sell or Strong Sell. The consensus 12-month price target is $825, implying -8.8% from the current price of $905. The bear case scenario is $240 and the bull case is $2029.
02What is the CAT stock price target for 2026?
The Wall Street consensus price target for CAT is $825 based on 53 analyst estimates. The high-end target is $1165 (+28.8% from today), and the low-end target is $650 (-28.1%). The base case model target is $1263.
03Is Caterpillar Inc. (CAT) stock overvalued in 2026?
CAT trades at 39.2x times forward earnings. The stock trades at a notable premium to the broad market, which is typical for businesses with strong free cash flow and above-average growth expectations. Based on current multiples versus the peer group, the relative model signals significantly overvalued. Whether the stock is over or undervalued ultimately depends on whether consensus earnings estimates are achievable.
04What are the main risks for Caterpillar Inc. (CAT) stock in 2026?
The primary risks for CAT in 2026 are: (1) Tariff‑Induced Margin Compression — Net incremental tariff headwinds of approximately $1. (2) Trade Policy & Regulatory Headwinds — U. (3) Earnings Quality Deterioration — Net income growth has outpaced operating cash flow growth, signaling a decline in earnings quality. Each factor has the potential to pressure earnings or compress the stock's valuation multiple.
05What is Caterpillar Inc.'s revenue and earnings forecast?
Analyst consensus estimates CAT will report consensus revenue of $74.4B (+5.2% year-over-year) and EPS of $22.93 (+13.4% year-over-year) for the upcoming fiscal year. The following year, analysts project $79.4B in revenue.
06When does Caterpillar Inc. (CAT) report its next earnings?
A confirmed upcoming earnings date for CAT is not yet available. Check the Earnings section above for the most recent quarterly report dates and forward estimates.
07How much free cash flow does Caterpillar Inc. generate?
Caterpillar Inc. (CAT) generated $11.4B in free cash flow over the trailing twelve months — a free cash flow margin of 16.2%. CAT returns capital to shareholders through dividends (0.6% yield) and share repurchases ($5.2B TTM).