Key Highlights
- Shares climbed approximately 10% to surpass $890, marking a record high following first-quarter results
- Quarterly earnings of $5.54 per share and revenue of $17.4 billion exceeded analyst projections of $4.65 EPS and $16.5 billion
- Power generation revenue skyrocketed 48%, fueled by robust data center infrastructure demand
- Company elevated its long-term annual revenue growth outlook to 6%–9% through 2030 from previous 5%–7% range
- Baird set a Wall Street-leading price target of $1,165; Morgan Stanley shifted rating from Sell to Hold
The heavy equipment manufacturer delivered first-quarter results that significantly exceeded market expectations, reporting earnings of $5.54 per share on revenue totaling $17.4 billion. Analyst consensus had called for earnings of $4.65 per share with sales of $16.5 billion. Following the announcement, shares rallied nearly 10% on Thursday, breaching the $890 mark for the first time.
Heading into Friday’s session, the stock had gained 55% since the start of the year and climbed an impressive 184% over the trailing twelve months.
Management also enhanced its forward-looking projections. The company now anticipates annual revenue expansion of 6% to 9% extending through 2030, representing an increase from the previous 5% to 7% outlook. For calendar year 2026 alone, management forecasts low double-digit revenue growth, an improvement from earlier guidance centered around 7%.
Chief Executive Officer Joe Creed attributed the performance to effective operational execution combined with durable end-market conditions. The power generation division experienced 48% growth, propelled by strong demand for large generator sets and turbines deployed in data center facilities.
CAT additionally disclosed a record order backlog reaching $63 billion, representing roughly 80% year-over-year growth.
Wall Street Analysts Revise Outlooks Higher
Baird’s Mig Dobre elevated his price objective to $1,165 from $940, establishing the most bullish target among Wall Street analysts. He maintains a Buy rating and designated the stock as a “Fresh Pick” following the earnings release, signaling his conviction for near-term appreciation. This target implies approximately 30% additional upside from present trading levels.
Dobre characterized the power generation market opportunity as being in its “early innings,” noting that substantial orders announced recently will be fulfilled over the coming five-year period.
He also emphasized that the first quarter represented the strongest order intake for the company’s Resource Industries division since 2012.
Morgan Stanley elevated its stance to Equal-weight from Underweight. The firm increased its price objective to $915 from $430, citing better-than-anticipated performance, the unprecedented backlog, and enhanced long-term expansion prospects driven by power generation sector demand.
Morgan Stanley currently projects a compound annual growth rate of 12% for the manufacturer spanning 2025 through 2030.
Analyst Community Adjusts Expectations
The consensus price target among analysts tracking the stock hovers around $860, which remains beneath current trading levels. This consensus figure has increased by approximately $80 following the quarterly report.
About half of the analysts covering the company maintain Buy ratings. The standard Buy-rating ratio across S&P 500 constituents typically ranges between 55% and 60%.
During early Friday trading activity, shares advanced 1.1% to approach the $900 level. The broader S&P 500 index gained 0.5% during the comparable timeframe.
Morgan Stanley pointed to accelerating capital investment from hyperscale cloud providers and expanding adoption of natural gas engines for data center applications as fundamental factors underpinning the improved forecast.
The company’s unprecedented $63 billion backlog delivers revenue visibility that analysts indicate reinforces confidence in maintaining momentum.
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