Key Stats for Caterpillar Stock
- Current Price: $709.62
- Target Price (Mid): $1,155.69
- Street Target (Mean): $739.29 (as of March 31, 2026)
- Potential Total Return: +61.1%
- Annualized IRR: 10.60% / year
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What Happened?
Caterpillar (CAT) hit an all-time high of $789.81 on February 12, 2026, after recovering from a 52-week low of $267.30, a gain of nearly 200% from trough to peak.
The stock has since pulled back roughly 10% to $709.62, and with Q1 2026 earnings due on April 23, investors are debating whether the selloff is a buying opportunity or a preview of margin pain to come.
The most recent catalyst was a blowout Q4.
Against an average analyst estimate of $4.71 adjusted EPS and $17,758.54 million in revenue, Caterpillar delivered $5.16 adjusted EPS and $19,133 million in revenue.
Despite the beat, the stock fell 1.18% on January 29. “Our centennial year marked a significant milestone, underscored by the highest full-year sales and revenues in Caterpillar’s history and a single-quarter record of $19.1 billion,” said CEO Joe Creed.
The market’s focus shifted immediately to the tariff warning embedded in the guidance. Caterpillar warned of a $2.6 billion tariff hit in 2026, with Q4 operating profit already down 9%, driven mainly by $1.03 billion of unfavorable manufacturing costs largely tied to higher tariffs.
Roughly $800 million of that 2026 tariff cost is expected to land in Q1 alone, split approximately 50% across Construction Industries, 20% in Resource Industries, and 30% in Power & Energy.
The counterweight is a backlog that has no historical precedent at this company.
Caterpillar ended 2025 with a $51 billion backlog, up $21 billion or 71% year over year, with 62% expected to deliver within the next twelve months, including a two-gigawatt generator set order for American Intelligence and Power Corporation’s Monarch Compute Campus, one of the largest single power solution orders in Caterpillar’s history.
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Is Caterpillar Undervalued Today?
At $709.62, CAT trades at 23.51x NTM EV/EBITDA and 31.31x NTM P/E per TIKR.
Those are not cyclical industrial multiples. They reflect the market’s view that Caterpillar’s expanding Power & Energy division, which supplies engines, turbines, and generator sets to data centers and power infrastructure, warrants a re-rating away from its historical equipment-cycle valuation.
The spread versus peers is significant. Deere & Company (DE) trades at 27.77x NTM EV/EBITDA and 30.46x NTM P/E on a $155.50 billion market cap. Cummins (CMI), which competes directly in engines and power systems, trades at 12.80x NTM EV/EBITDA and 20.89x NTM P/E on a market cap of $75.95 billion.
The TIKR machinery sector median NTM EV/EBITDA is 9.46x, and median NTM P/E is 18.18x, meaning CAT trades at roughly 2.5 times the sector median on earnings. That premium requires execution.
The risk is visible in the segment data. Per TIKR, Power & Energy revenue grew from $16,670 million in 2021 to $32,201 million in 2025, a 93% increase.
Construction Industries’ revenue over the same period grew from $21,994 million to $25,060 million, a 14% increase. The premium valuation is essentially a bet that Power & Energy keeps compounding while Construction holds.
Caterpillar guided full-year 2026 adjusted operating margins to remain near the bottom of its target range due to tariff impacts, noting that, excluding incremental tariffs, the margin would be in the top half. At an NTM MC/FCF of 38.04x, there is limited margin for error.
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TIKR Advanced Model Analysis
- Current Price: $709.62
- Target Price (Mid): $1,155.69
- Potential Total Return: +61.1%
- Annualized IRR: 10.60% / year
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The TIKR mid-case model uses a 6.2% revenue CAGR through December 31, 2030, driven by Power & Energy backlog conversion as data center construction spending continues and services revenue growth toward Caterpillar’s $30 billion target. The 19.2% net income margin assumption reflects recovery from the current 13.3% LTM net income margin as the 2026 tariff headwind moderates. That path produces a target price of $1,155.69, implying a 61.1% total return and a 10.60% annualized IRR from the model entry price of $717.22.
The Street’s mean analyst target of $739.29 from 26 estimates as of March 31, 2026, reflects a much shorter-horizon view, implying modest near-term upside while the tariff story resolves. The analyst breakdown per TIKR as of March 31, 2026: 14 Buys, 1 Outperform, 12 Holds, 1 Underperform, 2 Sells.
Conclusion: The metric to watch at Q1 2026 earnings on April 23 is adjusted operating profit margin. Caterpillar guided for $800 million in Q1 tariff costs. If margins come in above the bottom of the target range, the stock likely re-tests its all-time high above $789. If Q1 margins disappoint or tariff guidance worsens, the current pullback could extend.
A $51 billion backlog, a power generation business tied to secular AI infrastructure demand, and a TIKR model projecting 10.60% annualized returns through December 31, 2030, make Caterpillar a compelling long-cycle industrial. The question is whether the stock, at 23.51x NTM EV/EBITDA, already reflects all of that.
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Should You Invest in Caterpillar?
The only way to really know is to look at the numbers yourself. TIKR gives you free access to the same institutional-quality financial data that professional analysts use to answer exactly that question.
Pull up Caterpillar, and you’ll see years of historical financials, what Wall Street analysts expect for revenue and earnings in the quarters ahead, how valuation multiples have moved over time, and whether price targets are trending up or down.
You can build a free watchlist to track Caterpillar alongside every other stock on your radar. No credit card required. Just the data you need to decide for yourself.
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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 stocks mentioned. Thank you for reading, and happy investing!
