TLDR
- Bank of America has upped its price target for CAT from $735 to $825, maintaining a Buy rating following robust 2025 earnings.
- Caterpillar reported $67.6 billion in 2025 revenue, a 4% increase, with its Power & Energy division soaring 23% to $9.4 billion.
- Jim Cramer has endorsed CAT, pointing to demand for its turbines, though he favors Cummins (CMI) at current price levels.
- Short interest in CAT rose by approximately 61% in February, and insiders have sold more than $98 million in stock over the past 90 days.
- Following a 124% one-year surge, CAT trades at a P/E ratio of around 40, with a consensus analyst target of $712.52 and an average rating of “Moderate Buy.”
Caterpillar (CAT) has seen significant growth. The stock has climbed 124% over the past year and 28% year-to-date, opening at $752.81 on Friday.
Following the release of the company’s 2025 earnings report, Bank of America acted swiftly. It increased its price target for CAT from $735 to $825 while retaining its Buy rating.
BofA’s rationale was clear. CAT is experiencing turbine demand from sectors far beyond data centers, a factor the bank noted weakens concerns about turbine oversupply.
The figures supported this view. Caterpillar reported $67.6 billion in total 2025 revenue, a 4% year-over-year rise. Its Power & Energy segment was the top performer, expanding 23% to achieve $9.4 billion in sales.
Fourth-quarter results were also impressive. The company reported quarterly earnings per share of $5.16, exceeding the consensus estimate of $4.67. Revenue reached $19.13 billion, surpassing estimates of $17.81 billion by a substantial margin. This marked a 17.9% increase from the same quarter a year prior.
Jim Cramer recently commented on CAT, stating plainly, “We like their stuff.” He highlighted turbines and power-related products as the foundation of the bullish argument.
But Cramer also advised caution. When a club member asked in January about buying the stock, he noted it had already seen significant growth and expressed a preference for waiting for a pullback before adding to positions. He stated he currently prefers Cummins (CMI) over CAT at current prices.
Cramer also made a notable remark about retail investor access to the stock, suggesting management should do more to attract individual investors — and that a leading American company shouldn’t be priced at $749.
Analyst Ratings Split
The overall analyst sentiment is divided. Sixteen analysts have a Buy rating on CAT, seven have a Hold, and one has a Sell. The consensus price target is $712.52, which is below the stock’s current trading level.
Wells Fargo increased its target to $870 with an Overweight rating. Daiwa hiked its target to $790. Jefferies set a $750 target with a Buy. Oppenheimer adjusted its target to $729 with an Outperform. Morgan Stanley, however, only raised its target to $425 and maintained an Underweight rating.
Wall Street Zen downgraded CAT from Buy to Hold on February 21.
Insider Selling and Short Interest
Not all are bullish. Insider Denise C. Johnson sold 39,138 shares on February 2 at an average price of $681.08, totaling more than $26.6 million. This represented a 47% reduction in her stake.
Insider Bob De Lange followed suit on February 6, selling 22,656 shares at $720.11 for approximately $16.3 million. Over the past 90 days, insiders have sold a total of $98.2 million in stock.
Short interest also rose by about 61% in February, indicating some traders are betting on a decline.
Institutional investors hold 70.98% of CAT. Erste Asset Management boosted its holdings by 32.7% in Q3, adding 33,634 shares. Norges Bank initiated a new position worth more than $2.1 billion in Q2.
CAT’s 52-week range spans from $267.30 to $789.81. The stock has a P/E ratio of 40 and a market capitalization of $350.27 billion. Its next quarterly dividend is $1.51 per share, translating to an annualized yield of 0.8% or $6.04.
