CAT Relative Valuation
CAT's fair value is calculated using relative valuation, based on historical P/E and P/S ranges and their premiums/discounts relative to a competitor average, adjusted by weights. If the market price exceeds this fair value range, CAT is overvalued; if below, it's undervalued.
Historical Valuation
Caterpillar Inc (CAT) is now in the Overvalued zone, suggesting that its current forward PE ratio of 28.87 is considered Overvalued compared with the five-year average of 16.96. The fair price of Caterpillar Inc (CAT) is between 313.46 to 448.46 according to relative valuation methord. Compared to the current price of 603.16 USD , Caterpillar Inc is Overvalued By 34.5%.
Relative Value
Fair Zone
313.46-448.46
Current Price：603.16
34.5%
Overvalued
28.87
PE
1Y
3Y
5Y
21.26
EV/EBITDA
Caterpillar Inc. (CAT) has a current EV/EBITDA of 21.26. The 5-year average EV/EBITDA is 13.87. The thresholds are as follows: Strongly Undervalued below 8.92, Undervalued between 8.92 and 11.39, Fairly Valued between 16.35 and 11.39, Overvalued between 16.35 and 18.82, and Strongly Overvalued above 18.82. The current Forward EV/EBITDA of 21.26 falls within the Strongly Overvalued range.
25.00
EV/EBIT
Caterpillar Inc. (CAT) has a current EV/EBIT of 25.00. The 5-year average EV/EBIT is 16.18. The thresholds are as follows: Strongly Undervalued below 9.69, Undervalued between 9.69 and 12.94, Fairly Valued between 19.43 and 12.94, Overvalued between 19.43 and 22.67, and Strongly Overvalued above 22.67. The current Forward EV/EBIT of 25.00 falls within the Strongly Overvalued range.
3.99
PS
Caterpillar Inc. (CAT) has a current PS of 3.99. The 5-year average PS is 2.31. The thresholds are as follows: Strongly Undervalued below 1.26, Undervalued between 1.26 and 1.79, Fairly Valued between 2.84 and 1.79, Overvalued between 2.84 and 3.37, and Strongly Overvalued above 3.37. The current Forward PS of 3.99 falls within the Strongly Overvalued range.
24.12
P/OCF
Caterpillar Inc. (CAT) has a current P/OCF of 24.12. The 5-year average P/OCF is 14.60. The thresholds are as follows: Strongly Undervalued below 7.81, Undervalued between 7.81 and 11.21, Fairly Valued between 17.99 and 11.21, Overvalued between 17.99 and 21.38, and Strongly Overvalued above 21.38. The current Forward P/OCF of 24.12 falls within the Strongly Overvalued range.
30.95
P/FCF
Caterpillar Inc. (CAT) has a current P/FCF of 30.95. The 5-year average P/FCF is 17.75. The thresholds are as follows: Strongly Undervalued below 8.29, Undervalued between 8.29 and 13.02, Fairly Valued between 22.48 and 13.02, Overvalued between 22.48 and 27.21, and Strongly Overvalued above 27.21. The current Forward P/FCF of 30.95 falls within the Strongly Overvalued range.
Caterpillar Inc (CAT) has a current Price-to-Book (P/B) ratio of 13.56. Compared to its 3-year average P/B ratio of 8.90 , the current P/B ratio is approximately 52.25% higher. Relative to its 5-year average P/B ratio of 8.09, the current P/B ratio is about 67.52% higher. Caterpillar Inc (CAT) has a Forward Free Cash Flow (FCF) yield of approximately 2.70%. Compared to its 3-year average FCF yield of 5.18%, the current FCF yield is approximately -47.85% lower. Relative to its 5-year average FCF yield of 4.66% , the current FCF yield is about -42.06% lower.
13.56
P/B
Median3y
8.90
Median5y
8.09
2.70
FCF Yield
Median3y
5.18
Median5y
4.66
Competitors Valuation Multiple
The average P/S ratio for CAT's competitors is 2.50, providing a benchmark for relative valuation. Caterpillar Inc Corp (CAT) exhibits a P/S ratio of 3.99, which is 59.58% above the industry average. Given its robust revenue growth of 9.51%, this premium appears unsustainable.
Performance Decomposition
1Y
3Y
5Y
Market capitalization of CAT increased by 60.60% over the past 1 year. The primary factor behind the change was an increase in P/E Change from 18.51 to 30.70.
The secondary factor is the Revenue Growth, contributed 9.51%to the performance.
Overall, the performance of CAT in the past 1 year is driven by P/E Change. Which is more unsustainable.
People Also Watch
ANET
Arista Networks Inc
123.72USD
-4.89%
INTU
Intuit Inc
652.75USD
0.25%
GS
Goldman Sachs Group Inc
934.83USD
-0.66%
PLTR
Palantir Technologies Inc
176.86USD
-2.65%
UL
Unilever PLC
63.34USD
1.15%
AMGN
Amgen Inc
330.11USD
-3.37%
HSBC
HSBC Holdings PLC
80.49USD
0.29%
PGR
Progressive Corp
213.15USD
1.94%
HON
Honeywell International Inc
205.24USD
2.87%
NEE
Nextera Energy Inc
79.49USD
1.43%
Frequently Asked Questions
Is Caterpillar Inc (CAT) currently overvalued or undervalued?
Caterpillar Inc (CAT) is now in the Overvalued zone, suggesting that its current forward PE ratio of 28.87 is considered Overvalued compared with the five-year average of 16.96. The fair price of Caterpillar Inc (CAT) is between 313.46 to 448.46 according to relative valuation methord. Compared to the current price of 603.16 USD , Caterpillar Inc is Overvalued By 34.50% .
What is Caterpillar Inc (CAT) fair value?
CAT's fair value is calculated using relative valuation, based on historical P/E and P/S ranges and their premiums/discounts relative to a competitor average , adjusted by weights. The fair price of Caterpillar Inc (CAT) is between 313.46 to 448.46 according to relative valuation methord.
How does CAT's valuation metrics compare to the industry average?
The average P/S ratio for CAT's competitors is 2.50, providing a benchmark for relative valuation. Caterpillar Inc Corp (CAT) exhibits a P/S ratio of 3.99, which is 59.58% above the industry average. Given its robust revenue growth of 9.51%, this premium appears unsustainable.
What is the current P/B ratio for Caterpillar Inc (CAT) as of Jan 08 2026?
As of Jan 08 2026, Caterpillar Inc (CAT) has a P/B ratio of 13.56. This indicates that the market values CAT at 13.56 times its book value.
What is the current FCF Yield for Caterpillar Inc (CAT) as of Jan 08 2026?
As of Jan 08 2026, Caterpillar Inc (CAT) has a FCF Yield of 2.70%. This means that for every dollar of Caterpillar Inc’s market capitalization, the company generates 2.70 cents in free cash flow.
What is the current Forward P/E ratio for Caterpillar Inc (CAT) as of Jan 08 2026?
As of Jan 08 2026, Caterpillar Inc (CAT) has a Forward P/E ratio of 28.87. This means the market is willing to pay $28.87 for every dollar of Caterpillar Inc’s expected earnings over the next 12 months.
What is the current Forward P/S ratio for Caterpillar Inc (CAT) as of Jan 08 2026?
As of Jan 08 2026, Caterpillar Inc (CAT) has a Forward P/S ratio of 3.99. This means the market is valuing CAT at $3.99 for every dollar of expected revenue over the next 12 months.