Caterpillar Inc. (CAT), headquartered in Irving, Texas, manufactures and sells construction and mining equipment, off-highway diesel and natural gas engines, industrial gas turbines, and diesel-electric locomotives. Valued at $170 billion by market cap, the company produces excavators, loaders, and motor graders for construction, as well as mining trucks, shovels, and autonomous solutions.
Shares of this machinery giant have underperformed the broader market over the past year. CAT has gained 9.5% over this time frame, while the broader S&P 500 Index ($SPX) has rallied nearly 20.5%. In 2025, CAT stock is down 3%, compared to SPX’s 2.9% rise on a YTD basis.
Narrowing the focus, CAT’s underperformance is also apparent compared to iShares U.S. Industrials ETF (IYJ). The exchange-traded fund has gained about 17.6% over the past year. Moreover, the ETF’s 3.9% gains on a YTD basis outshine the stock’s losses over the same time frame.
CAT's shares declined amid concerns over new tariffs on goods from Canada, Mexico, and China, reflecting potential trade disruptions and the expected negative impact of stricter trade policies on its operations. Additionally, ongoing uncertainty under the Trump administration, coupled with the consistent rise in interest rates, has driven up borrowing costs for dealers, further adding to its challenges.
On Jan. 30, CAT shares closed down more than 4% after reporting its Q4 results. Its adjusted EPS of $5.14 surpassed Wall Street expectations of $4.97. The company’s revenue was $16.2 billion, falling short of Wall Street forecasts of $16.6 billion.
For fiscal 2025, ending in December, analysts expect CAT’s EPS to decline 8.8% to $19.98 on a diluted basis. The company’s earnings surprise history is mixed. It beat the consensus estimates in three of the last four quarters while missing the forecast on another occasion.
Among the 21 analysts covering CAT stock, the consensus is a “Moderate Buy.” That’s based on eight “Strong Buy” ratings, one “Moderate Buy,” 10 “Holds,” one “Moderate Sell,” and one “Strong Sell.”
This configuration is less bearish than a month ago, with three analysts suggesting a “Strong Sell.”
On Feb. 5, Bernstein analyst Chad Dillard maintained a “Hold” rating on CAT with a price target of $360, implying a potential upside of 2.3% from current levels.
The mean price target of $397 represents a 12.8% premium to CAT’s current price levels. The Street-high price target of $490 suggests an ambitious upside potential of 39.2%.
On the date of publication, Neha Panjwani did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.More news from Barchart
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