Caterpillar Inc. CAT
Caterpillar's pullback to $816 from recent highs has brought its P/E of 35.0 to a 12.7% discount versus the peer median of 40.1, and smart money scores have improved meaningfully to 0.6767 as of the quarter ended 2026-06-30 from 0.2123 at year-end 2025. However, FY2025 fundamentals show real deterioration: operating margin compressed to 16.6% from 20.2% and EPS fell 14.6% to $18.83, even as revenue grew 4.3% to $67.6B.
The AI data-center power generation narrative is a genuine tailwind and technicals are oversold (RSI 39.8), but the combination of declining margins, $43.3B in total debt against $21.3B equity, and net insider selling of $244M over 24 months keeps the risk-reward balanced rather than compelling.
What could go wrong
- Margin compression persists. FY2025 operating margin fell to 16.6% from 20.2% in FY2024 and gross margin dropped to 32.3% from 36.0%, suggesting cost pressures or mix headwinds that could worsen if end markets cool.
- Elevated leverage. Total debt of $43.3B against stockholders' equity of $21.3B as of FY2025 limits financial flexibility, particularly in a cyclical downturn.
- Insider selling. Over the trailing 24 months, insiders net sold approximately 139,745 shares worth $244M, with no cluster buying detected; recent transactions are only small phantom stock unit accruals.
- Cyclical peak risk. Stock is up 113% in 12 months per news coverage, trading above the 200-day MA of $759 but well below the 50-day MA of $908, suggesting momentum has rolled over despite the long-term uptrend.
What would change my mind
Where this comes from: peer_relative (as of latest data) · smart_money points · derived_metrics FY2025 vs FY2024 · derived_metrics FY2025 revenue_growth_yoy. Orin's read on CAT; not advice.
Twelve months actual closes to 2026-09-23 · actual filings
50-day average 200-day average · volume below
On file
All CAT filingsLargest holders · 13F Q2 2026
Money flow| Filer | Position | Of fund |
|---|---|---|
| State Street | $36.6B | 1.1% of fund |
| Vanguard Capital Management | $32.0B | 0.7% of fund |
| Vanguard Portfolio Management | $12.8B | 0.6% of fund |
| Geode Capital Management | $11.9B | 0.6% of fund |
| Morgan Stanley | $8.0B | 0.4% of fund |
| Jpmorgan Chase & | $7.6B | 0.4% of fund |
182 filers · quarter ended Q2 2026 · positions, not flows
Insiders, last 24 months: 310 Form 4 filings, net −$280.1M. Of the 50 on hand, 0 were open-market purchases and 18 sales— the rest are grants, option exercises and tax withholding.
Ask Orin about CAT
Orin answers questions about CAT from its filings, transcripts and numbers — with the source behind every claim. Your own desk starts with 3 free days, card required.
Start 3 free days →Where it trades
| Metric | Now | Own median | Sector |
|---|---|---|---|
| P/E | 34.8× | 17.3× | 44.5× |
| EV/EBITDA | 23.7× | 13.0× | — |
| P/S | 5.01× | 2.25× | — |
| P/B | 19.3× | 8.0× | — |
Its P/E sits above all 5 of the last 5 years (+2.79σ from its own mean).
20.3%
free-cash-flow growth every year for 10 years, discounted at 10%, is what today’s price implies — starting from $7.5B of trailing free cash flow. It is an assumption the market is making, not a forecast Orin is making.
What Wall Street published
$986
$882 – $1155 · +21% against today's price
- 31 buy or overweight
- 21 hold
- 4 underweight or sell
The analysts’ consensus and their own ratings, not Orin’s. A target is a twelve-month opinion published by the firm that wrote it.
Against the companies it is compared to
| Company | Market cap | P/E | EV/EBITDA | Gross | Net | ROE |
|---|---|---|---|---|---|---|
| CATCaterpillar Inc. | $374B | 34.8× | 23.7× | 33.9% | 14.5% | 54% |
| DEDeere & Company | $192B | 39.3× | 22.2× | 35.7% | 10.2% | 18% |
| ETNEaton Corporation plc | $170B | 44.5× | 29.6× | 35.9% | 12.8% | 20% |
| GEGE Aerospace | $332B | 37.5× | 28.0× | 35.4% | 17.7% | 49% |
| PCARPACCAR Inc | $59B | 23.5× | 19.1× | 14.9% | 9.2% | 13% |
| PHParker-Hannifin Corporation | $122B | 33.6× | 22.5× | 37.7% | 17.0% | 25% |
| RTXRTX Corporation | $259B | 33.4× | 18.0× | 20.3% | 8.3% | 12% |
The median is of the 6 peers listed above and nothing else — check it against the column. This company trades 2.2% below it. The peer set is the vendor’s, so a company can appear here that a person would not have chosen.
What it has traded at
What its sector has traded at
Two scales, drawn separately on purpose: a sector median and one company’s multiple are not the same number and putting them on one axis invites a comparison neither series supports.
Discounted cash flow
| Model | Fair value | Against | Computed |
|---|---|---|---|
| Standard DCF | $195 | $860.66 · −77% | 2026-06-10 |
| Levered DCF | $213 | $860.66 · −75% | 2026-06-10 |
The vendor’s intrinsic-value models. Treat them as a low-growth anchor — for a fast grower the market routinely pays well above a DCF. These were computed against the price in the “against” column, not today’s.
Every estimate on one scale
The vertical rule is the current price. Ranges and point estimates are the backend’s, published as they were calculated; an arrow means the estimate sits beyond this scale, and its number is on the right.