Key Takeaways
- Caterpillar stock fell 10% in the past month through Monday’s close while the S&P 500 rose 0.6%, and three sessions did most of the damage.
- Rising Treasury yields and doubts about the premium on its data center power business drove the selling, while the company’s own news was routine.
- Four firms cut their price targets in two weeks and none downgraded the stock, and the $946 mean target sits about 30% above Monday’s close.
- At about 25x forward earnings, the stock looks worth buying, and third-quarter margins on Oct. 29 are the number to watch.
Caterpillar (CAT) stock is down 10% in the past month (through Monday’s close), a stretch when the S&P 500 rose 0.6%. That leaves it 32% below its June 30 high, though it’s still up 27% in 2026.
So is it time to sell, or load up?
Three bad days did most of the damage
The worst came on Wednesday, Oct. 7, when Caterpillar fell 5.8%. The 30-year Treasury yield touched 5.73% that day, its highest since May 2002, and minutes from the Fed’s September meeting pointed to more rate hikes. That afternoon, an FTC and USDA inquiry into the farm-equipment market hit the whole machinery group, though the notice names Deere (DE) and leaves Caterpillar out.
On Oct. 13, it fell another 3.3% with no company news, as yields climbed again. Deere edged higher that day, a sign investors were trimming the premium on Caterpillar’s data center power business.
A day later, it fell 3.1% as Oppenheimer cut its price target, the third of four firms to do so in two weeks…
- Truist (Oct. 5): $1,100, from $1,225, flagging rates, input costs and how long AI power spending lasts
- Citi (Oct. 12): $950, from $1,100
- Oppenheimer (Oct. 14): $1,009, from $1,118, citing price/cost pressure on margins
- BofA (Oct. 19): $850, from $989
None of the four downgraded the stock.
TIKR tracks 29 analysts on Caterpillar. How many say “Buy”?
See the full breakdown of Buy, Hold, and Sell ratings on Caterpillar, along with Wall Street’s revenue and earnings estimates, all in one place. More than 500,000 investors use TIKR to research stocks like this one. See Caterpillar’s Analyst Ratings
Nothing broke at Caterpillar
The company’s own news this month was routine: a dealership deal, a $1 billion North Carolina plant, an unchanged $1.63 quarterly dividend and a new mining chief.
And the second quarter that powered this year’s run still stands. Sales hit a record $20.5 billion, up 24%, the backlog grew 92% to $72 billion, and power generation sales jumped 72% on data center demand. Chairman and CEO Joe Creed told analysts on the August call that “no one is slowing down at the moment,” with customers ordering as far out as 2030.
Analysts haven’t cut their earnings forecasts either. TIKR consensus has normalized EPS climbing from $19.06 in 2025 to $39.21 in 2028, about where it stood in early October.
The risk to them is margins, which is what Oppenheimer flagged.
Oct. 29 is the real test
Caterpillar reports third-quarter results before the open on Thursday, Oct. 29. TIKR consensus as of Oct. 8 called for $20.45 billion of revenue and an EBIT margin near 19%, down from 21.9% in the second quarter.
On a Sept. 10 investor call, Creed called Power & Energy’s second-quarter incremental margin of more than 40% “a little noisy.” He also said turning customers’ reserved power slots into firm orders could be lumpy.
A margin at or above 19%, with power orders still converting, would back the bull case. One well short of it would give the rate worries more weight.
Cheaper, if not cheap
At the June 30 high, Caterpillar traded at 42x forward earnings. By early October, that was down to 28.75x, and as of Oct. 16 it sat at 25.2x, still above its five-year average of 19.3x.
So investors are still paying up for the power business, just far less than in June.
The Street’s mean target has slipped only to $946, from a $979 peak in August, leaving it about 30% above Monday’s close.
If long yields keep climbing, or margins come in well short on Oct. 29, the multiple could keep sliding toward that 19x average.
My take: I’d lean toward loading up. A 25x multiple on earnings that analysts expect to roughly double by 2028, with orders booked into 2030, looks like a fair price. Of course, Oct. 29 could change that quickly if margins or the power backlog disappoint.
So what is Caterpillar stock actually worth?
TIKR lets you forecast the future price of any stock in less than a minute. Just enter a few assumptions into TIKR’s valuation model and see what Caterpillar could be worth. Start from Wall Street consensus estimates, or adjust the inputs to reflect your own view of the business. It’s free to use.
Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any of the stocks mentioned. Thank you for reading, and happy investing!
