| Factor | Score | Distribution | Value | Avg | Rank |
|---|---|---|---|---|---|
Valuation | 28 | 29.8x | 17.3x | Bottom tier | |
Growth | 60 | 18.4% | 7.1% | Around median | |
Quality | 79 | 15.7% | 4.5% | Top tier | |
Safety | 67 | 1.8x | 2.6x | Top tier | |
Capital Return | 75 | 0.66% | 0.06% | Top tier | |
Momentum | 48 | 56.7% | -1.6% | Around median | |
Sentiment | 74 | 18 | 3 | Top tier |
The floor: what the company is worth if growth stopped today
86% of today's price is what a buyer pays for growth that has not happened yet.
10-year US Treasury yield 4.96% as of 2026-10-22. Estimates computed from company data and analyst targets, not investment advice.
Ten ratios that matter, each compared against its sector median and average — so you can see whether a number is rich or cheap relative to peers in the same sector.
Caterpillar manufactures construction and mining equipment, engines, power generators, and turbines, generating revenue from equipment, parts, and services sales, as well as financing and insurance through Financial Products. Construction Industries serves construction, infrastructure, and rental fleets, while Resource Industries serves mining and quarrying, and Power & Energy benefits from power generation, gas compression, and data center needs. The expanding installed base of equipment and engines provides the company with subsequent opportunities for maintenance and refurbishment.
In quarter 2 of fiscal year 2026 (ended 2026-06-30), revenue according to EL7 data was approximately $20.5 billion, net income was $3.6 billion, and diluted earnings per share were $7.8. Gross margin was 37.8%, and operating margin according to EL7 calculations was approximately 20.9%. Operating cash flow according to EL7 data was approximately $4.4 billion for the same quarter; a reliable comparison of year-over-year revenue growth is unavailable because the definition of the line item differs between the periods.
Construction Industries led segment sales in quarter 2 of fiscal year 2026 at $8.3 billion, followed by Power & Energy at $8.2 billion and Resource Industries at $4.6 billion, while Financial Products recorded revenue of $1.1 billion; these are segment figures that cannot be directly added together to arrive at consolidated revenue. Power & Energy's profit margin was approximately 24.6%, compared with 23.3% for Construction Industries and 14.9% for Resource Industries in the same quarter. Caterpillar therefore combines a substantial construction contribution with a strong energy demand driver, alongside lower segment profitability in resource equipment.
Q2 FY2026
Last 12 months to 2026-06-30
When: 2026-10-29
Revenue according to EL7 data at the $20.5 billion level
Operating margin according to EL7 calculations at the 20.9% level
When:
The median analyst price target is $948 within a range of $749 to $1155, a low-confidence indicative estimate based on 4 analysts that prices in expected growth. The industry-multiple valuation is $511 within a range of $321 to $670, using next year's earnings and a median multiple of 18.4 times for ten companies, measuring Caterpillar's value when treated like its peers. The discounted cash flow model gives a value of $369 within a range of $300 to $463 at a discount rate of 12.3%, compared with $95 for the no-growth value, which holds current after-tax operating profit constant forever at the same discount rate. The methods agree that the value of the ongoing business with growth exceeds the value with no further growth, but differ considerably in magnitude because analyst targets price in expected expansion, the industry multiple prices in peer comparisons, and the cash flow model prices in expected cash generation. Analyst targets tend toward optimism and cash flow models toward conservatism; the target cuts by Bernstein SocGen Group to $749 on 2026-10-14 and Citi to $950 on 2026-10-12 also reflect differing assessments of the continuation of business strength.
Figures in the text are as of 2026-10-19; the live price is shown at the top of the page.
Caterpillar sells generators, engines, and turbines to provide primary and backup power, including Cat and Solar Turbines products. In quarter 2 of fiscal year 2026 (ended 2026-06-30), power generation sales to users increased by 72% compared with the same quarter of the previous fiscal year, supported by large generators and turbines used in data centers. The company plans to begin shipping the 10-megawatt gas engine being returned to production in quarter 4 of fiscal year 2026, while it sees most maintenance opportunities associated with new primary power installations extending beyond 2030.
Operating cash flow according to EL7 data was approximately $13.6 billion for the last 12 months through 2026-06-30, compared with net income of $10.8 billion, representing a conversion rate of 125%. Free cash flow calculated by EL7 (operating cash flow minus capital expenditure) for the last 12 months was $10.2 billion. Share repurchases were $7.2 billion for the same period, showing that returning capital to shareholders is an important use of cash alongside investment in the business.
Automated analysis for informational purposes only — not investment advice.
Tariff costs at the $600 million estimate
When: Quarter 4 of fiscal year 2026
Start of shipments of the 10-megawatt gas engine
Operating margin according to EL7 calculations was approximately 20.9% in quarter 2 of fiscal year 2026 (ended 2026-06-30). Management explained that the quarter included expected IEEPA tariff refunds of $392 million, while it expected tariff costs of approximately $600 million in quarter 3 of fiscal year 2026. Power & Energy expansions add depreciation and manufacturing costs, while technology and research and development expenses continue, so management expects an adjusted operating margin near the lower end of its target range for fiscal year 2026 when excluding the refunds.
The Cat Compact plan, mentioned in the 2026-09-30 news report, concerns an investment of approximately $1 billion to increase manufacturing capacity in North Carolina. It includes a facility in Sanford to produce compact track loaders and telehandlers, aiming to improve customer access to equipment. The 2026-09-29 news report concerns an agreement to acquire John Fabick Tractor, which operates 37 locations in Missouri, Illinois, Wisconsin, and Michigan, a distribution-related step whose closing has not been established by the available information.
The earnings announcement is confirmed for 2026-10-29 and will allow an assessment of continued demand and production's ability to meet it. Revenue according to EL7 data of $20.5 billion and operating margin according to EL7 calculations of 20.9% in quarter 2 of fiscal year 2026 (ended 2026-06-30) provide two benchmarks for comparison using consistent financial definitions. The $72 billion order backlog at the end of the same quarter also warrants monitoring alongside deliveries and new orders, because a decline resulting from faster execution differs from a decline resulting from weaker demand.