CAT Should I Buy
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Caterpillar Inc. (CAT) is a good buy for a beginner investor with a long-term strategy and $50,000-$100,000 available for investment. The stock shows strong long-term growth potential, supported by positive analyst ratings, a robust backlog, and congressional buying activity. Despite some short-term financial pressures, the company's strategic acquisitions and market position make it a solid choice for long-term investment.
The technical indicators are moderately bullish. The MACD histogram is above 0 and positively contracting, indicating a bullish trend. The RSI is neutral at 63.643, and the moving averages are bullish (SMA_5 > SMA_20 > SMA_200). The stock is trading above its pivot point of 734.085, with resistance levels at 781.736 and 811.174, suggesting room for upward movement.
Analysts have raised price targets significantly, with multiple 'Buy' and 'Outperform' ratings.
Recent acquisition of RPMGlobal enhances Caterpillar's mining software solutions.
Strong congressional buying activity, with $1.5M-$5.0M in purchases over the last 90 days.
Record backlog of $51B and broad-based demand across business segments.
Insiders are selling, with a 736.94% increase in selling activity over the last month.
Financial performance in Q4 2025 showed a decline in net income (-13.94% YoY), EPS (-11.42% YoY), and gross margin (-16.55% YoY).
In Q4 2025, Caterpillar's revenue increased by 18% YoY to $19.13B, driven by strong demand. However, net income dropped by 13.94% YoY to $2.4B, and EPS declined by 11.42% YoY to $5.12, reflecting margin pressures and elevated costs.
Analysts are broadly positive on Caterpillar, with multiple price target increases. The highest target is $825 (BofA), and the lowest is $425 (Morgan Stanley). Analysts highlight strong demand, a robust backlog, and growth in key segments like power generation and oil & gas.
