Caterpillar Surges as Earnings Exceed Expectations Amid AI Demand
Written by Emily J. Thompson, Senior Investment Analyst
Source: Yahoo Finance
- Earnings Growth: Caterpillar reported an adjusted profit of $5.16 per share, slightly up from $5.14 a year ago, exceeding Wall Street's expectations of $4.71, indicating enhanced profitability amid strong demand.
- Revenue Increase: The company's quarterly revenue reached $19.1 billion, an 18% increase from $16.2 billion a year earlier, reflecting robust performance in its power and energy segment, particularly driven by surging demand from AI data center construction.
- Record Backlog: Caterpillar's equipment order backlog grew to $51.2 billion, up $11.3 billion quarter-over-quarter, demonstrating strong demand for equipment like natural gas turbines and electricity transformers, further solidifying its market position.
- Capital Expenditure Outlook: The company anticipates capital expenditures of around $3.5 billion in 2026, primarily for capacity expansion, signaling confidence in future growth and a proactive response to market demand.
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Analyst Views on CAT
Wall Street analysts forecast CAT stock price to fall over the next 12 months. According to Wall Street analysts, the average 1-year price target for CAT is 620.54 USD with a low forecast of 395.00 USD and a high forecast of 730.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
15 Analyst Rating
8 Buy
6 Hold
1 Sell
Moderate Buy
Current: 643.280
Low
395.00
Averages
620.54
High
730.00
Current: 643.280
Low
395.00
Averages
620.54
High
730.00
About CAT
Caterpillar Inc. is a manufacturer of construction and mining equipment, off-highway diesel and natural gas engines, industrial gas turbines and diesel-electric locomotives. The Company operates through its various segments, namely Construction Industries, Resource Industries, and Energy & Transportation. It also provides financing and related services through its Financial Products segment. The Construction Industries segment is primarily responsible for supporting customers using machinery in infrastructure and building construction applications. The Resource Industries segment develops and manufactures high productivity equipment for both surface and underground mining operations, as well as provide hydraulic systems, electronics and software for its machines and engines. The Energy & Transportation segment offers product and services that includes reciprocating engines, generator sets, integrated systems and solutions, turbines and turbine-related services.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Caterpillar Q4 Earnings Preview: Mixed Expectations
- Earnings Expectations: Caterpillar is expected to report Q4 EPS of $4.71, reflecting an 8.4% decline year-over-year, while revenue is projected to increase nearly 10% to $17.76 billion, indicating the company's potential amid surging demand for energy and transportation equipment.
- Business Growth: The energy and transportation unit has outperformed expectations, becoming the fastest-growing segment, although traditional construction and mining operations are weighed down by U.S. import tariffs, impacting overall profitability.
- Market Performance: Over the past two years, Caterpillar has beaten EPS estimates 63% of the time and revenue estimates 38% of the time, demonstrating its ability to manage market expectations, despite analysts maintaining a cautious outlook for the future.
- Stock Performance: Caterpillar's stock rose 59% last year, significantly outperforming the S&P 500's 16% increase, reflecting market confidence in its future growth potential.
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