Caterpillar Inc (CAT)
Fair ValueFundamental
68
Price
$687.00
Market Cap
$340.26B
Part 1 · What the company is worth
Overview
Caterpillar is the world's leading manufacturer of construction equipment, mining equipment, diesel and natural gas engines, industrial gas turbines, and diesel-electric locomotives. The company also provides customer financing through Cat Financial. With 156 independent dealer organizations worldwide, Caterpillar serves construction, mining, energy, transportation, and industrial customers globally.
How it makes money
Caterpillar's revenue comes from three primary sources: equipment sales (including construction, mining, power generation, and transportation equipment) representing the majority of revenue; parts and services sales generating higher margins and recurring revenue throughout equipment lifecycles; and financing services through Cat Financial, which provides customer financing and insurance solutions. The company is transitioning toward a services-intensive model, targeting $28 billion in services revenue by 2026.
Revenue by segment
Manufactures and sells earthmoving equipment, material handling machinery, and related systems for construction, infrastructure, and urban development applications. Serves contractors, builders, and infrastructure project developers globally.
Manufactures mining equipment, aggregates equipment, and related products for resource extraction customers. Serves mining companies, aggregates producers, and related industries globally, with revenue tied to commodity prices and mining exploration spending.
Manufactures industrial gas turbines for power generation, diesel engines for locomotives and marine applications, and related power systems. Serves utility companies, data centers, transportation companies, and other industrial customers worldwide. Benefits from renewable energy transition and data center growth.
Provides customer financing, insurance, and related financial services to support equipment sales and dealer operations worldwide. Finances customers' purchases of Caterpillar equipment and manages dealer inventory financing programs.
Competitive moat
Scale · WideCaterpillar's moat derives from multiple integrated sources: a global network of 156 independent dealer organizations that create high switching costs through parts availability and local service support; significant economies of scale in manufacturing and supply chain management; strong brand recognition built over decades; patents and trademarks for key products and technologies; and an integrated financing business (Cat Financial) that supports customer purchases. The company benefits from customer lock-in through the ecosystem of equipment, parts, services, and financing.
What drives demand
CyclicalCaterpillar's demand is highly cyclical, driven by macroeconomic conditions and capital expenditure cycles across construction, mining, and energy sectors. Construction Industries demand correlates with infrastructure spending, housing starts, and nonresidential construction activity. Resource Industries demand depends on commodity prices and mining exploration budgets. Energy & Transportation demand is influenced by power generation needs, with emerging structural growth drivers from data center expansion (AI infrastructure) and renewable energy transition. During strong economic periods, all segments see robust demand; during recessions or commodity downturns, demand can collapse rapidly.
Key risks
- Cyclical demand exposure — Caterpillar's business is highly sensitive to economic cycles. Demand for construction and mining equipment declines sharply during recessions or periods of weak capital expenditure. Historical precedent shows that during the 2015-2016 downturn driven by collapsing commodity prices and reduced construction spending, Caterpillar's revenues declined approximately 23% and adjusted earnings per share fell more than 45%.
- Commodity price volatility — Demand from mining customers is heavily dependent on commodity prices (gold, copper, iron ore) and mining exploration budgets. Declining commodity prices directly reduce customer capital expenditures for mining equipment, creating a significant revenue headwind for the Resource Industries segment.
- Geographic and geopolitical risks — Caterpillar operates globally with significant exposure to regions with political and economic volatility, including China. Instability, tariffs, supply chain disruptions, or major slowdowns in key markets like China construction could materially impact results. The company is also exposed to currency fluctuations in international operations.
- Supply chain and input cost pressures — Caterpillar faces risks from supply chain disruptions, freight cost volatility, fuel price fluctuations, and tariffs. Rising steel, aluminum, and component costs can squeeze margins if the company cannot fully pass these costs to customers through pricing.
- Competition and market intensity — Caterpillar operates in highly competitive markets with global and regional competitors. Competitors compete on price, product capability, financing terms, and dealer support. Competitive pressure could limit Caterpillar's ability to maintain pricing or market share.
Customer concentration
Caterpillar has no single customer or dealer representing significant concentration of credit risk, according to the company's 10-K disclosure. The company is diversified across multiple geographies, end markets, and customer types. However, concentration risk manifests more through end-market cyclicality—for example, a sharp decline in Chinese construction would materially impact overall demand—rather than through single-customer dependency.
The case for
Buyers argue that Caterpillar is well-positioned to benefit from multiple structural growth drivers: governments worldwide are investing in infrastructure programs that will require years of equipment purchases; the global energy transition creates durable demand for renewable power generation equipment and electrical power systems; the artificial intelligence boom is driving data center construction requiring backup power systems, positioning Caterpillar's power generation business for outsized growth; the company has a strong order backlog providing multi-year revenue visibility; management has demonstrated operational excellence with returns on equity exceeding 40% and disciplined capital allocation including a $21.8 billion share buyback program; the company is successfully pivoting toward a services-intensive business model targeting $28 billion in services revenue by 2026, which offers higher margins and more recurring, stable revenue; the integrated dealer network and Cat Financial create competitive advantages and customer lock-in.
The case against
Sellers fear that Caterpillar, despite recent strength, remains fundamentally a cyclical industrial company vulnerable to macroeconomic downturns. Historical experience during the 2015-2016 downturn shows how quickly this business can deteriorate: revenues fell 23% and adjusted earnings per share declined more than 45% over two years. Any recession triggered by rising interest rates, credit tightening, or other shocks would likely devastate customer capital expenditure plans. Chinese construction slowdown would be particularly damaging given China's importance to global demand. While data center and renewable energy growth provide new sources of demand, the core business remains exposed to commodity prices, which could decline if economic growth disappoints. Cat Financial's profitability depends on higher interest rate environments; if rates fall as part of a recessionary scenario, profitability would suffer. Valuations reflect optimism about sustained strong growth and margin expansion that may not materialize. Regional competitors and pricing pressure could limit Caterpillar's ability to pass cost increases to customers.
Generated with artificial intelligence on September 21, 2026, shared with all users
Direct competitors
Who this company fights with for the same customers
Generated with artificial intelligence on September 18, 2026, shared with all users
Deere's Construction & Forestry division competes head-on with Caterpillar for North American contractors buying backhoes, loaders and excavators, and both companies also sell through a comparable network of exclusive dealers.
Komatsu is Caterpillar's closest global rival and the world's second-largest maker of excavators, dozers and mining trucks, selling to the same contractors and mining companies in essentially every market Caterpillar serves.
Volvo CE is one of the top global suppliers of articulated haulers, wheel loaders and excavators, competing with Caterpillar for the same infrastructure, quarry and mining customers, especially in Europe.
Hitachi Construction Machinery is a specialist in hydraulic excavators and large mining shovels, the product lines where it takes orders directly against Caterpillar in Asia, Australia and the Americas.
Family-owned Liebherr competes with Caterpillar across earthmoving machines and mining equipment, and is a particularly strong alternative for European buyers of large excavators and cranes.
Sany sells excavators, cranes and concrete machinery at lower price points, taking share from Caterpillar in China and increasingly in emerging markets and Europe.
Balance Sheet & Liquidity
Revenue
$74.73B
Trailing 12 months (through 6/30/2026)
Net Income
$10.84B
Trailing 12 months (through 6/30/2026)
Free Cash Flow
$8.92B
Total Equity
$21.32B
Total Liabilities
$77.27B
Current Ratio
1.37
Interest Coverage
-
Debt/EBITDA
2.75
Earnings Per Share
Revenue & Net Income
Free Cash Flow
Income Breakdown
Historical statement
Margins over time
Debt over time
How heavy the debt is
Growth grid
Growth — Revenue
Fair Value Estimation
Fair Value
$873.97
Current Price
$687.00
Margin of Safety
+21.4%
Fair Value Range
$720.91 - $1027.02
Spread across the valuation methods used, not a statistically calibrated confidence interval.
Estimation Methods
Valuation Metrics
P/E Ratio
29.57
ROE
41.7%
P/B Ratio
16.28
P/FCF
29.52
Gross Margin
34.3%
ROIC
16.5%
Profitability Radar
Value Creation (Economic Moat)
ROIC
16.5%
WACC
12.0%
ROIC − WACC
+4.5 pp
ROIC exceeds the cost of capital — the company is creating value for shareholders.
Fundamental Analysis Criteria
Passed (20)
- EPS shows upward trend
- EPS CAGR 7.21%
- Price CAGR 23.23%
- ROIC 16.5%
- Gross margin 34.3%
- P/FCF 29.52
- Debt/equity ratio
- Operating margin 17.5%
- Positive free cash flow
- Current ratio
- Debt/EBITDA
- Return on tangible assets
- Low reliance on intangibles
- ROE 54.2%
- Revenue growth 5Y 10.1%
- Earnings surprise, average 16.7%
- PEG ratio 1.12
- Earnings quality (operating cash flow / net income) 1.25
- Share dilution -3.5%
- Piotroski F-Score 5/9
Failed (5)
- P/B ratio 16.28
- CapEx intensity
- Price below Graham Number
- DCF valuation (Overvalued)
- Net margin trend 14.5% vs 14.9%
Unavailable (2)
- Dividend payout –
- Interest coverage
Piotroski F-Score
Mixed signals: some areas need attention
Earnings Quality
High quality: earnings backed by cash
Share Dilution
Buying back shares. Shareholder friendly
Institutional Holdings
Governance
Executive Team
| Name | Title | Age |
|---|---|---|
| Mr. Joseph E. Creed CPA | Chairman & CEO | 49 |
| Ms. Christine M. Pambianchi | Chief Human Resources Officer | 57 |
| Ms. Denise C. Johnson | Group President of Resource Industries | 59 |
| Mr. Bob De Lange | Group President of Services, Distribution & Digital | 55 |
| Mr. Kyle J. Epley | Chief Financial Officer | 52 |
| Mr. William E. Schaupp | VP & Chief Accounting Officer | 53 |
| Ms. Jaime Mineart | Senior VP & CTO | - |
| Ms. Jamie L. Engstrom | Senior VP & Chief Information Officer | 47 |
| Alex Kapper | Vice President of Investor Relations | - |
| Mr. Derek R. Owens | Chief Legal Officer & General Counsel | 51 |
Audit Risk
4
Board Risk
4
Compensation Risk
3
Shareholder Rights Risk
5
Documents
- View document
Annual Report (10-K)
A yearly overview of the business, its financial results, and the risks it faces.
Filed on 2026-02-13
- View document
Quarterly Report (10-Q)
A snapshot of financial performance for the most recent three-month period.
Filed on 2026-08-05
- View document
Current Report (8-K)
An announcement of a major event, such as a leadership change or big news.
Filed on 2026-10-15
via SEC EDGAR
Income History
via SEC EDGAR
Part 2 · The price and its context
This part shows how the price has behaved, not whether the company is worth owning. Inside: technical analysis, potential, historical drawdowns, gamma exposure.
Market Reaction Profile
How much CAT moves, measured on its daily prices.
More volatile than 60% of the tracked stocks (90-day volatility).
- Volatility 30d
- 34.7%
- Volatility 90d
- 40.4%
- Beta vs S&P 500 (1y)
- 1.83Correlation 0.58
- Max drawdown (12m)
- -35.5%
- ATR (14d, % of price)
- 3.98%
Earnings reactions
How CAT moved around its past quarterly results.
Next earnings release
Oct 29, 2026 · In 5 days · Before the open
EPS estimate: 7.03Revenue estimate: $20.7B
What usually happens
- Over the last 12 releases the stock moved a median of 4.0% the next day, up or down.
- Next-day moves: up 8, down 4 (out of 12).
- Of the 4 releases that beat estimates, the stock fell the next day after 0.
Release history
| Date | When | EPS est. | EPS actual | Surprise | Gap | 1 day | 5 days |
|---|---|---|---|---|---|---|---|
| Aug 4, 2026 | Before the open | 6.26 | 8.17 | +30.5% | +11.1% | +5.6% | +0.9% |
| Apr 30, 2026 | Before the open | 4.66 | 5.54 | +18.8% | +5.8% | +9.9% | +14.4% |
| Jan 29, 2026 | Before the open | 4.72 | 5.16 | +9.3% | +1.8% | +3.4% | +7.5% |
| Oct 29, 2025 | Before the open | 4.57 | 4.95 | +8.3% | +6.4% | +11.6% | +4.4% |
| Aug 5, 2025 | Before the open | n/a | n/a | n/a | -1.4% | +0.1% | -5.8% |
| Apr 30, 2025 | Before the open | n/a | n/a | n/a | +2.5% | +0.6% | +4.4% |
| Jan 30, 2025 | Before the open | n/a | n/a | n/a | -5.0% | -4.6% | -8.7% |
| Oct 30, 2024 | Before the open | n/a | n/a | n/a | -3.5% | -2.1% | -1.1% |
| Aug 6, 2024 | Before the open | n/a | n/a | n/a | -0.9% | +3.0% | +6.1% |
| Apr 25, 2024 | Before the open | n/a | n/a | n/a | -9.1% | -7.0% | -8.9% |
| Feb 5, 2024 | Before the open | n/a | n/a | n/a | +6.3% | +2.0% | +0.7% |
| Oct 31, 2023 | Before the open | n/a | n/a | n/a | -6.0% | -6.7% | -1.6% |
Release dates from SEC 8-K filings.
Updated 10/24/2026
Historical statistics for educational purposes only. They are not forecasts and not investment advice.
Price reaction to the news
Latest news on CAT and what the price did next.
- 10/13/2026NegativeCaterpillar scende sotto supporto chiave dopo tagli dei target di Citi e Truist
Published while the US market was open: the move of that day cannot be split into before and after the news, so no figure is shown.
- 8/4/2026PositiveCaterpillar’s stock gives the Dow a 200-point boost as data-center demand drives record revenue
Published while the US market was open: the move of that day cannot be split into before and after the news, so no figure is shown.
- 7/2/2026NegativeMichael Burry just shorted Caterpillar’s 172% AI rally. One analyst says his bet won’t even matter
- +1 day
- -0.2%
- +3 days
- -1.7%
- 7/1/2026NegativeMichael Burry’s Short Call Dents Caterpillar’s AI-Fueled Rally
Published while the US market was open: the move of that day cannot be split into before and after the news, so no figure is shown.
- 6/22/2026PositiveCaterpillar’s stock hits a milestone as AI-fueled industrials rally sweeps up Wall Street
- +1 day
- -2.3%
- +3 days
- +4.8%
- 6/11/2026PositiveHeadline no longer in the latest news feed
- +1 day
- +0.9%
- +3 days
- +3.6%
Return of the stock minus return of SPY over the same days. A news item close to a price move did not necessarily cause it. Historical data for educational purposes only, not investment advice.
Latest News
Recent headlines for CAT.
- 11d agoNEGATIVECaterpillar scende sotto supporto chiave dopo tagli dei target di Citi e Truist
Caterpillar shares have experienced a significant downturn, falling from a June high of $1,070 to $759, the lowest point since April 16th. This represents a 30% decline from its year-to-date peak. The stock is approaching a bearish crossover pattern, suggesting further declines may be imminent. While Caterpillar previously benefited from its Power and Energy division, linked to the AI boom, and was a top performer in the Dow Jones, recent analyst target cuts from Citi and Truist have weighed heavily on investor sentiment. This downward pressure indicates a loss of momentum and potential for continued underperformance.
- 8/4/2026POSITIVECaterpillar’s stock gives the Dow a 200-point boost as data-center demand drives record revenue
Caterpillar Inc. (CAT) experienced a significant surge in its stock price, contributing 200 points to the Dow Jones Industrial Average. This rally was fueled by the company's record revenue, largely driven by robust demand from data-center construction projects. The company reported its largest earnings beat in five years, signaling strong operational performance and market positioning. Investors are likely to view this news favorably, anticipating continued growth from infrastructure spending, particularly in the technology sector.
- 8/3/2026NEUTRALCaterpillar Faces Earnings Test After AI Selloff Hits Stock
Caterpillar Inc. is set to release its earnings report amidst significant stock volatility, having shed nearly 25% of its value last month. This upcoming report will serve as a crucial test for investors to gauge whether the recent enthusiasm surrounding Caterpillar as an artificial intelligence play has been overblown. The market's reaction will likely depend on whether the company's fundamental performance can justify the speculative AI-driven valuation, or if the selloff reflects a more grounded assessment of its business prospects.
- 7/2/2026NEGATIVEMichael Burry just shorted Caterpillar’s 172% AI rally. One analyst says his bet won’t even matter
Michael Burry, known for his prescient market calls, has reportedly initiated a short position against Caterpillar, citing concerns that the stock's recent 172% rally, attributed to AI enthusiasm, is unsustainable. This move suggests a bearish outlook from a prominent investor who believes the market has overvalued Caterpillar's AI prospects. However, one analyst counters that the rally is underpinned by a genuine structural shift, implying that Burry's bet may be ill-timed. Investors are now faced with conflicting signals, weighing Burry's contrarian view against the potential for continued AI-driven growth.
- 7/1/2026NEGATIVEMichael Burry’s Short Call Dents Caterpillar’s AI-Fueled Rally
Caterpillar Inc. stock experienced a decline from its record high following Michael Burry's announcement of a short position. Burry, renowned for his prescient bearish calls, has initiated his first-ever short on the industrial giant. This move by a prominent short-seller, especially one with a history of accurate market timing, introduces significant uncertainty and could weigh on investor sentiment, potentially reversing recent gains fueled by AI-related optimism.
- 6/22/2026POSITIVECaterpillar’s stock hits a milestone as AI-fueled industrials rally sweeps up Wall Street
Caterpillar Inc. has reached a significant milestone, with its stock price surpassing the $1,000 mark, positioning it as one of only two companies in the Dow Jones Industrial Average to achieve this valuation. This surge is attributed to a broader rally in AI-influenced industrial stocks on Wall Street. The company's performance highlights investor confidence in the industrial sector's adaptation to and benefit from artificial intelligence technologies. For shareholders, this price level signifies strong market performance and potential continued upward momentum as the industrial sector embraces AI-driven efficiencies and innovations.