Key Takeaways
- Bank of America upgraded Caterpillar’s price target from $735 to $825, keeping its Buy rating after reviewing the company’s solid 2025 fiscal performance.
- The construction and mining equipment manufacturer posted $67.6 billion in yearly sales with 4% expansion, while Power & Energy surged 23% to reach $9.4 billion.
- CNBC’s Jim Cramer voiced approval for CAT’s turbine operations but recommended Cummins (CMI) as a superior value proposition at current pricing.
- Short selling activity jumped approximately 61% in February, concurrent with corporate executives unloading over $98 million in stock during the previous quarter.
- With shares trading around 40 times earnings following a 124% twelve-month climb, CAT holds a consensus analyst target of $712.52 and a “Moderate Buy” rating overall.
Caterpillar (CAT) has been on a remarkable ascent. The stock has soared 124% over the trailing twelve months and added 28% year-to-date through 2025, opening Friday’s trading at $752.81.
In response to Caterpillar’s complete 2025 fiscal year report, Bank of America promptly revised its position. The financial institution raised its price forecast for CAT from $735 to $825 while maintaining its Buy designation.
BofA’s reasoning was straightforward. Caterpillar is witnessing turbine orders from diverse industries that go well beyond data center needs, which the bank believes addresses worries about potential turbine market saturation.
The company’s numbers validated this perspective. Caterpillar recorded $67.6 billion in consolidated revenue for 2025, marking a 4% year-over-year advance. The Power & Energy segment stood out as the top contributor, growing 23% to post $9.4 billion in sales.
Fourth-quarter results were similarly strong. The manufacturer posted earnings per share of $5.16 for the three-month period, beating the Street consensus of $4.67. Sales totaled $19.13 billion, substantially exceeding expectations of $17.81 billion. This marked a 17.9% jump versus the same quarter in the previous year.
Jim Cramer recently weighed in on CAT, stating directly, “We like their stuff.” He emphasized turbines and power machinery as the basis for the positive investment case.
Nevertheless, Cramer also voiced some caution. When a club participant asked in January about initiating a position, he observed the stock had already enjoyed considerable gains and mentioned he’d rather see a correction before increasing exposure. He stated he currently views Cummins (CMI) as more appealing than CAT at today’s valuations.
Cramer additionally offered critique concerning retail shareholder engagement, arguing that Caterpillar’s management should be putting forth greater effort to attract individual investors — and pondering why a legendary American company trades at $749.
Wall Street Opinions Diverge
The broader analyst universe shows mixed sentiment. CAT presently holds sixteen Buy recommendations, seven Hold ratings, and one Sell designation. The consensus price objective sits at $712.52, which is actually beneath the stock’s current market price.
Wells Fargo raised its target to $870 with an Overweight rating. Daiwa lifted its forecast to $790. Jefferies set a $750 objective with a Buy call. Oppenheimer adjusted to $729 with an Outperform designation. Morgan Stanley, conversely, only bumped its target to $425 while retaining an Underweight position.
Wall Street Zen downgraded CAT from Buy to Hold on February 21st.
Executive Sales and Bearish Bets
Not everyone shares the optimistic view. Executive Denise C. Johnson sold 39,138 shares on February 2nd at an average of $681.08, generating more than $26.6 million. This sale reflected a 47% decrease in her holdings.
Insider Bob De Lange completed his own transaction on February 6th, selling 22,656 shares at $720.11 for roughly $16.3 million. Over the last 90 days, company executives have collectively disposed of $98.2 million in stock.
Short interest also climbed roughly 61% throughout February, signaling that certain traders are betting on a downturn.
Institutional stakeholders own 70.98% of CAT’s shares outstanding. Erste Asset Management increased its position by 32.7% in Q3, acquiring 33,634 shares. Norges Bank initiated a new holding worth more than $2.1 billion in Q2.
CAT’s 52-week price range spans from $267.30 to $789.81. The equity currently commands a P/E multiple of 40 with a market cap of $350.27 billion. The next quarterly dividend payment is $1.51 per share, equating to an annual payout of $6.04 and a yield of 0.8%.
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