Caterpillar (CAT) AI Stock Analysis

• Market Cap: $161.50B
• Dividend Yield: 1.64%
• Average Volume (3M): 2.55M
• Price to Earnings (P/E): 16.7
• Beta (1Y): 1.14
• 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: 2,566,788
• 30 Day Avg. Volume: 2,549,303
• PEG Ratio: -0.81
• Price to Book (P/B): 9.29
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 19.37
• Enterprise Value/Market Cap: 1.24
• Enterprise Value/Revenue: 0.77
• Enterprise Value/Gross Profit: 8.95
• Enterprise Value/Ebitda: 3.12
• 1Y Price Target: $364.07
• Price Target Upside: 6.02% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 15

• Rating: 73 Outperform
• Price Target: $394.00 ▲( 14.74% Upside)

Caterpillar's overall score reflects strong financial health and reasonable valuation, tempered by technical indicators suggesting caution due to overbought conditions and recent sales decline. While the company demonstrates robust profitability and strategic shareholder returns, challenges such as revenue decline and economic uncertainties necessitate cautious optimism.

Positive Factors

Backlog

Caterpillar's backlog covers more revenue than ever, allowing it to cover a significant portion of its sales.

Demand

Better than expected dealer inventories and more resilient demand are positive signs for Caterpillar.

Trade discussions

The better than expected progress and outcomes of trade discussions with China reduces downside risk to earnings and multiples.

Negative Factors

Earnings

Caterpillar's 1Q adjusted EPS and sales were below consensus expectations.

Operating income

Caterpillar's operating income declined 2% in 2024, with current consensus factoring in another 18% decline in 2025.

Tariffs

The biggest headwind will be price/cost issues, exacerbated by $1.2B in tariffs.

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 financials show strong profitability with a net profit margin of 15.7% TTM and a healthy ROE of 55%. The balance sheet is solid with an equity ratio of 21.3%, though a moderate debt-to-equity ratio of 2.1 requires monitoring. Cash flows are robust, but declining revenue and slightly decreasing free cash flow are concerns.

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
63.26B	64.81B	67.06B	59.43B	50.97B	41.75B
	Gross Profit
22.45B	23.32B	23.26B	17.51B	15.00B	12.08B
	EBIT
12.39B	13.07B	12.97B	7.90B	6.88B	4.55B
	EBITDA
15.46B	16.04B	15.71B	11.97B	10.63B	7.27B
	Net Income Common Stockholders
9.94B	10.79B	10.34B	6.71B	6.49B	3.00B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
3.56B	6.89B	6.98B	7.00B	9.25B	9.35B
	Total Assets
84.97B	87.76B	87.48B	81.94B	82.79B	78.32B
	Total Debt
38.59B	38.41B	37.88B	36.99B	37.79B	37.16B
	Net Debt
35.03B	31.52B	30.90B	29.99B	28.54B	27.81B
	Total Liabilities
66.90B	68.27B	67.97B	66.05B	66.28B	62.95B
	Stockholders Equity
18.07B	19.49B	19.49B	15.87B	16.48B	15.33B
Cash Flow		Free Cash Flow
8.59B	8.82B	9.79B	5.17B	4.73B	4.21B
	Operating Cash Flow
11.27B	12.04B	12.88B	7.77B	7.20B	6.33B
	Investing Cash Flow
-3.59B	-2.45B	-5.87B	-2.54B	-3.08B	-1.49B
	Financing Cash Flow
-9.06B	-9.56B	-6.93B	-7.28B	-4.19B	-3.75B

Caterpillar Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 343.39
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: 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 343.39 is above the 20-day moving average (MA) of 332.84, above the 50-day MA of 320.61, and below the 200-day MA of 355.00, indicating a neutral trend. The MACD of 9.57 indicates Negative momentum. The RSI at 60.34 is Neutral, neither overbought nor oversold. The STOCH value of 44.14 is Neutral, 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	77 Outperform	$48.95B	14.14	19.90%	1.32%	-8.64%	-31.57%
OSK	76 Outperform	$6.29B	10.44	15.24%	1.93%	5.95%	-10.59%
DE	75 Outperform	$138.44B	24.67	24.07%	1.21%	-22.25%	-37.83%
CAT	73 Outperform	$161.50B	16.73	55.67%	1.64%	-5.58%	-7.37%
CNH	66 Neutral	$15.94B	15.36	13.26%	3.68%	-21.99%	-52.11%
Sector *	65 Neutral	$4.41B	12.06	5.22%	249.80%	4.09%	-12.16%
AGCO	55 Neutral	$7.49B	46.40	-13.60%	1.15%	-23.02%	-152.78%

Caterpillar Corporate Events

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.

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.

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.