Caterpillar (CAT) AI Stock Analysis

• Market Cap: $156.16B
• Dividend Yield: 1.67%
• Average Volume (3M): 2.63M
• Price to Earnings (P/E): 14.8
• Beta (1Y): 1.31
• Revenue Growth: -3.36%
• EPS Growth: 9.59%
• Country: US
• Employees: 112,900
• Sector: Industrials
• Sector Strength: 66
• Industry: Industrial Machinery
• EPS (TTM): 22.07
• Shares Outstanding: 477,932,040
• 10 Day Avg. Volume: 2,702,304
• 30 Day Avg. Volume: 2,631,795
• PEG Ratio: 1.54
• Price to Book (P/B): N/A
• Price to Sales (P/S): 2.45
• Price to Cash Flow (P/CF): 11.70
• P/FCF Ratio: 16.80
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $384.55
• Price Target Upside: 17.69% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 11

Caterpillar's overall stock score is moderated by a combination of strong financial health and cash flow alongside challenges in sales and revenue growth. Technical analysis indicates a bearish trend, but valuation remains fair, offering potential upside if future earnings improve. The earnings call underscores both achievements and challenges, with a focus on maintaining profitability amidst market pressures.

Positive Factors

Backlog Growth

The backlog increased by $1.3B due to strong demand in Energy & Transportation, especially for solar turbines and reciprocating engines.

Future Performance

There is potential for a return to double-digit EPS growth in 2026, suggesting improved future performance.

Negative Factors

Earnings Risk

There is a material risk of further earnings cuts throughout 2025, leading to an Underweight rating on CAT and a lower price target.

Sales and Margins

Profits missed expectations for Q4, and CAT guided to sales declines in 2025, driven by Construction and Resources, while consensus had sales growing in 2025.

Caterpillar Business Overview & Revenue Model

Company Description

Founded in 1925, Illinois-based Caterpillar, Inc. manufactures construction and mining equipment, diesel and natural gas engines, industrial gas turbines, and diesel-electric locomotives. It operates through the following segments, including Construction Industries, Resource Industries, Energy and Transportation, Financial Products, and All Other.

How the Company Makes Money

Caterpillar generates revenue primarily through the sale and leasing of machinery and engines, as well as providing related parts and services. The company's key revenue streams include the Construction Industries segment, which offers heavy construction equipment; the Resource Industries segment, supplying equipment for mining and quarrying; and the Energy & Transportation segment, which provides engines and turbines for various applications. Additionally, Caterpillar's Financial Products division contributes through financing solutions that support customer purchases and leases of Caterpillar equipment. The company also benefits from its global dealer network, which enhances market reach and customer service, and strategic partnerships that expand its technological capabilities and market presence.

Caterpillar Financial Statement Overview

Summary

Caterpillar demonstrates solid financial health with strong cash flow and a robust equity base. However, the stagnation in net income in 2024 requires attention, as it affects overall profitability metrics. The company's ability to maintain revenue growth amidst industry challenges is commendable, but careful management of liabilities and operational costs will be crucial for sustaining long-term growth.

Income Statement

Caterpillar's income statement reflects stable performance in the industrial machinery sector. The gross profit margin is robust, indicating effective cost management. The net profit margin, while positive in previous years, dropped to zero in 2024, signaling potential challenges in cost or expense management. Revenue growth over the years is positive, showing the company's ability to increase sales in a competitive market. EBIT and EBITDA margins indicate stable operational efficiency, albeit with room for improvement.

Balance Sheet

Caterpillar's balance sheet reveals a solid equity base with a moderate debt-to-equity ratio, suggesting a balanced approach to leveraging. The return on equity indicates effective utilization of shareholder funds, although there is a decline in equity ratio over time, highlighting increased liabilities. Overall, the company maintains a stable asset base, but growing liabilities could pose future risks.

Cash Flow

The cash flow statement for Caterpillar shows strong operating cash flow, supporting the company's ability to generate cash from its operations. Free cash flow has grown over the years, which is a positive indicator for future investments and shareholder returns. The operating cash flow to net income ratio is favorable, though the free cash flow to net income ratio reflects some volatility, impacted by recent net income challenges.

Breakdown
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
64.81B	67.06B	59.43B	50.97B	41.75B
	Gross Profit
23.32B	23.26B	17.51B	15.00B	12.08B
	EBIT
13.07B	12.97B	7.90B	6.88B	4.55B
	EBITDA
16.04B	15.71B	11.97B	10.63B	7.27B
	Net Income Common Stockholders
10.79B	10.34B	6.71B	6.49B	3.00B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
6.89B	6.98B	7.00B	9.25B	9.35B
	Total Assets
87.76B	87.48B	81.94B	82.79B	78.32B
	Total Debt
11.06B	37.88B	36.99B	37.79B	37.16B
	Net Debt
4.17B	30.90B	29.99B	28.54B	27.81B
	Total Liabilities
68.27B	67.97B	66.05B	66.28B	62.95B
	Stockholders Equity
19.49B	19.49B	15.87B	16.48B	15.33B
Cash Flow		Free Cash Flow
8.82B	9.79B	5.17B	4.73B	4.21B
	Operating Cash Flow
12.04B	12.88B	7.77B	7.20B	6.33B
	Investing Cash Flow
-2.45B	-5.87B	-2.54B	-3.08B	-1.49B
	Financing Cash Flow
-9.56B	-6.93B	-7.28B	-4.19B	-3.75B

Caterpillar Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 326.75
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Positive
• STOCH: 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 326.75 is below the 20-day moving average (MA) of 349.87, below the 50-day MA of 363.73, and below the 200-day MA of 359.34, indicating a bearish trend. The MACD of -10.22 indicates Positive momentum. The RSI at 26.87 is Positive, neither overbought nor oversold. The STOCH value of 21.98 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for CAT.

Caterpillar Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
TEX	78 Outperform	$2.50B	7.60	18.29%	1.77%	-0.47%	-34.74%
OSK	77 Outperform	$6.15B	9.21	16.14%	1.94%	11.36%	13.78%
DE	74 Outperform	$124.41B	20.32	27.66%	1.29%	-20.93%	-34.33%
PCAR	74 Outperform	$53.26B	12.84	23.77%	1.17%	-4.29%	-9.76%
CMI	72 Outperform	$47.75B	12.24	41.27%	2.00%	0.14%	444.36%
CAT	66 Neutral	$156.16B	14.82	55.36%	1.67%	-3.36%	9.59%
Sector *	62 Neutral	$8.11B	13.34	1.17%	3.02%	4.16%	-15.14%

Caterpillar Corporate Events

Caterpillar Reports Decline in 2024 Sales and Revenue

Caterpillar announced its financial results for the fourth quarter and full-year 2024, with sales and revenues declining by approximately 5% and 3% respectively compared to 2023. Despite the decrease in sales, the company achieved record adjusted profit per share and maintained a strong cash flow, deploying significant cash for share repurchases and dividends, reflecting continued investor confidence.