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Caterpillar
(NYSE:CAT)
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Rating:72Outperform
Price Target:
$951.00
â–²(7.01% Upside)
Action:Upgraded
Date:08/07/26
CAT’s score is driven primarily by strong financial performance and a very constructive earnings call (raised guidance, record free cash flow, and a much larger backlog). Offsetting these positives are mixed/weak near-term technical signals (negative MACD and trading below shorter moving averages) and a demanding valuation (P/E ~40 with a sub-1% dividend yield).
Positive Factors
Strong cash generation
Caterpillar’s substantial TTM operating and free cash flow, with ~93% FCF-to-net-income conversion, supplies durable internal funding for capex, R&D, dividends and buybacks. Reliable cash generation strengthens resilience through cycles and supports long-term capital allocation.
Negative Factors
Elevated leverage
High leverage (~2.31x debt-to-equity and multidecade-sized total debt) amplifies cyclical sensitivity and interest-rate exposure. With operating cash flow covering a modest share of total debt, leverage constrains financial flexibility for large investments or to absorb demand shocks over the medium term.
Read all positive and negative factors
Positive Factors
Negative Factors
Strong cash generation
Caterpillar’s substantial TTM operating and free cash flow, with ~93% FCF-to-net-income conversion, supplies durable internal funding for capex, R&D, dividends and buybacks. Reliable cash generation strengthens resilience through cycles and supports long-term capital allocation.
Read all positive factors
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 (CAT) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$386.53B
Dividend Yield0.76%
Average Volume (3M)3.31M
Price to Earnings (P/E)35.0
Beta (1Y)1.09
Revenue Growth18.36%
EPS Growth18.23%
CountryUS
Employees118,000
SectorIndustrials
Sector Strength72
IndustryAgricultural - Machinery
Share Statistics
EPS (TTM)23.34
Shares Outstanding459,674,900
10 Day Avg. Volume2,625,964
30 Day Avg. Volume3,309,871
Financial Highlights & Ratios
PEG Ratio-2.06
Price to Book (P/B)12.54
Price to Sales (P/S)3.95
P/FCF Ratio26.01
Enterprise Value/Market Cap<0.01
Enterprise Value/Revenue<0.01
Enterprise Value/Gross Profit<0.01
Enterprise Value/Ebitda<0.01
Forecast
1Y Price Target
$1,006.21Price Target Upside13.22% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering15
EPS Forecast (FY)27.14
Revenue Forecast (FY)$79.32B
Caterpillar Business Overview & Revenue Model
Company Description
Caterpillar Inc., a global enterprise founded in 1925 and headquartered in Deerfield, Illinois (having previously operated as Caterpillar Tractor Co. until its rebranding in 1986), is a premier manufacturer and vendor of heavy construction and min...
How the Company Makes Money
Caterpillar makes money primarily by selling new equipment, selling high-margin aftermarket products and services over the life of that equipment, and earning income from financing.
1) Sales of new equipment (primary revenue driver):
- Machinery:...
Caterpillar Earnings Call Summary
Earnings Call Date:Aug 04, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Nov 04, 2026
Earnings Call Sentiment Positive
The earnings call presented a strongly positive operational and financial performance: record revenue and free cash flow, materially expanded backlog, raised full-year guidance, robust segment growth, and active capital returns. Challenges were noted — notably tariffs, higher SG&A/R&D and manufacturing costs tied to capacity expansion, regional softness in some markets, dealer inventory seasonality, and extended lead times — but management provided mitigation context (IEEPA recovery, capacity ramp actions, and disciplined investment). On balance, the favorable revenue, margin expansion, cash generation and backlog growth significantly outweigh the outlined headwinds, supporting a constructive outlook.Positive Updates
Record Quarterly Sales and Revenue
Sales and revenues were $20.5 billion in Q2 2026, up 24% year-over-year — the first time in company history the company exceeded $20 billion in a single quarter.
Negative Updates
Tariff Headwinds and Ongoing Uncertainty
Tariff costs (excluding IEEPA recoveries) were approximately $400 million in Q2 (favorable to prior $700M estimate), but full-year 2026 tariff costs are expected to be around $2.2 billion excluding the ~$400 million IEEPA recovery recognized in Q2; tariffs continue to pressure margins and remain a fluid risk.
Read all updates
Q2-2026 Updates
Positive
Negative
Record Quarterly Sales and Revenue
Sales and revenues were $20.5 billion in Q2 2026, up 24% year-over-year — the first time in company history the company exceeded $20 billion in a single quarter.
Read all positive updates
Company Guidance
Caterpillar raised 2026 guidance to mid‑ to high‑teens sales and revenues growth with adjusted operating profit margin now expected to be higher than in April (excluding the Q2 IEEPA recovery, full‑year margin is expected near the bottom of the target range); services revenues are now expected to grow faster and all three primary segments are expected to outperform prior guidance. Management recognized a $392 million IEEPA tariff recovery in Q2, said Q2 tariff costs (excluding recoveries) were about $400 million, now expects full‑year tariff costs (excluding recoveries) of ~ $2.2 billion (Q3 tariffs ~ $600 million with ~50% in Construction Industries and ~25% each in Power & Energy and Resource Industries) and does not assume additional IEEPA recoveries in H2. Liquidity/cash flow guidance was raised: Q2 MP&E free cash flow was a record $5.1 billion and full‑year MP&E FCF is expected in the top half of the $6–$15 billion target range (second‑half FCF slightly higher than H1); CapEx is still expected to be about $3.5 billion, restructuring ~$300–$350 million, and the estimated annual effective tax rate ~23%. Operational metrics tied to the outlook include a $72 billion backlog (up $9 billion sequentially and ~ $35 billion, or +92% year‑over‑year) with 59% of backlog slated for delivery in the next 12 months, and continued plans to return substantially all MP&E free cash flow to shareholders.Caterpillar Financial Statement Overview
Summary
Income Statement
86
Very Positive
Balance Sheet
63
Positive
Cash Flow
78
Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 74.73B | 67.59B | 64.81B | 67.06B | 59.43B | 50.97B |
| Gross Profit | 25.31B | 21.86B | 23.32B | 23.26B | 17.51B | 15.00B |
| EBITDA | 17.40B | 14.86B | 16.04B | 15.71B | 11.41B | 11.04B |
| Net Income | 10.83B | 8.87B | 10.79B | 10.34B | 6.71B | 6.49B |
Balance Sheet | ||||||
| Total Assets | 102.61B | 98.58B | 87.76B | 87.48B | 81.94B | 82.79B |
| Cash, Cash Equivalents and Short-Term Investments | 6.71B | 9.98B | 6.89B | 6.98B | 7.00B | 9.25B |
| Total Debt | 45.15B | 43.33B | 38.41B | 37.88B | 36.99B | 37.79B |
| Total Liabilities | 83.22B | 77.27B | 68.27B | 67.97B | 66.05B | 66.28B |
| Stockholders Equity | 19.39B | 21.32B | 19.49B | 19.49B | 15.87B | 16.48B |
Cash Flow | ||||||
| Free Cash Flow | 8.99B | 10.27B | 8.82B | 9.79B | 5.17B | 4.73B |
| Operating Cash Flow | 13.57B | 11.74B | 12.04B | 12.88B | 7.77B | 7.20B |
| Investing Cash Flow | -6.64B | -4.71B | -2.45B | -5.87B | -2.54B | -3.08B |
| Financing Cash Flow | -5.59B | -3.90B | -9.56B | -6.93B | -7.28B | -4.19B |
Caterpillar Technical Analysis
Negative
888.73
Price Trends
907.14
Negative
872.41
Negative
756.32
Positive
Market Momentum
-15.37
Negative
39.82
Neutral
29.90
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CAT, the sentiment is Negative. The current price of 888.73 is above the 20-day moving average (MA) of 848.36, below the 50-day MA of 907.14, and above the 200-day MA of 756.32, indicating a neutral trend. The MACD of -15.37 indicates Negative momentum. The RSI at 39.82 is Neutral, neither overbought nor oversold. The STOCH value of 29.90 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative 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 0 New Risks
Caterpillar Peers Comparison
UnderperformOutperform
Sector (63)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
77 Outperform | $67.39B | 26.78 | 12.73% | 2.05% | -10.49% | -18.64% | |
72 Outperform | $386.53B | 34.97 | 54.14% | 0.69% | 18.36% | 18.23% | |
72 Outperform | $9.12B | 17.05 | 12.32% | 1.39% | 1.93% | -12.16% | |
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% | |
63 Neutral | $158.92B | 32.82 | 18.25% | 1.03% | 3.98% | -14.68% | |
62 Neutral | $6.89B | 13.75 | 12.45% | 0.97% | 1.74% | 443.88% | |
43 Neutral | $12.41B | 41.38 | 4.01% | 0.90% | 0.60% | -62.01% |
* Industrials Sector Average
CAT
Caterpillar
816.15
399.31
95.80%
AGCO
Agco
99.52
-12.21
-10.93%
CNH
CNH Industrial
10.29
-1.77
-14.70%
DE
Deere
580.63
94.01
19.32%
OSK
Oshkosh
149.85
14.46
10.68%
PCAR
Paccar
127.47
31.65
33.03%
Caterpillar Corporate Events
Business Operations and StrategyStock BuybackDividendsFinancial Disclosures
Caterpillar Reports Record Q2 2026 Revenue and Profit
Positive
Aug 4, 2026
On Aug. 4, 2026, Caterpillar reported record second-quarter 2026 sales and revenues of $20.5 billion, a 24% increase from the same period in 2025, driven primarily by higher sales volumes and favorable pricing. Profit per share rose to $7.77, with...
DividendsShareholder Meetings
Caterpillar boosts quarterly dividend following shareholder meeting
Positive
Jun 11, 2026
At its virtual annual meeting on June 10, 2026, Caterpillar Inc. shareholders re-elected all board nominees to one-year terms, ratified PricewaterhouseCoopers as independent auditor for 2026 and approved executive compensation in an advisory vote,...
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.