TLDR
- Bank of America elevated CAT’s price objective from $735 to $825 while maintaining its Buy recommendation following impressive 2025 financial results.
- The heavy equipment manufacturer delivered $67.6 billion in 2025 sales, marking a 4% increase, with Power & Energy operations jumping 23% to $9.4 billion.
- CNBC’s Jim Cramer expressed support for CAT’s turbine business but indicated preference for Cummins (CMI) at present valuation levels.
- February witnessed a sharp 61% surge in short positions against CAT, while company executives offloaded more than $98 million in shares during the previous 90-day period.
- Following a 124% annual surge, CAT now commands a P/E ratio near 40, with Wall Street’s average target at $712.52 and a consensus “Moderate Buy” recommendation.
Caterpillar (CAT) shares have experienced remarkable momentum. The industrial giant’s stock has surged 124% over the trailing twelve months and climbed 28% year-to-date, with Friday’s opening price reaching $752.81.
Following the release of Caterpillar’s 2025 annual results, Bank of America didn’t hesitate. The financial institution bumped its price objective on CAT shares from $735 up to $825 while reaffirming its Buy stance.
The bank’s rationale was clear-cut. According to BofA analysts, CAT is experiencing turbine demand across multiple industries far beyond data center construction, which undermines concerns about potential turbine market saturation.
The financial performance validated this thesis. [[LINK_START_2]]Caterpillar[[LINK_END_2]] delivered total sales of $67.6 billion throughout 2025, representing a 4% year-over-year gain. The company’s Power & Energy division emerged as the star performer, expanding 23% to generate $9.4 billion in revenue.
Fourth-quarter performance was equally impressive. The machinery manufacturer recorded earnings of $5.16 per share for the period, surpassing analyst expectations of $4.67. Total quarterly revenue reached $19.13 billion, substantially exceeding the $17.81 billion consensus forecast. This represented a 17.9% increase compared to the prior-year quarter.
CNBC’s Jim Cramer recently shared his perspective on CAT, stating plainly, “We like their stuff.” He highlighted the company’s turbine and power generation equipment as key drivers supporting the bullish investment thesis.
However, Cramer also advised measured expectations. When a club member inquired about initiating a position in January, he noted the stock had already experienced substantial appreciation and suggested waiting for a potential price decline before buying. He indicated that at current valuations, he prefers Cummins (CMI) to CAT.
Cramer additionally offered a sharp observation regarding retail investor participation, suggesting that Caterpillar’s leadership team should work harder to attract individual investors — and questioning why such an iconic American enterprise trades at $749.
Analyst Ratings Split
Wall Street’s outlook on CAT presents a divided picture. Currently, sixteen analysts rate the stock as Buy, seven recommend Hold, and one suggests Sell. The consensus price target stands at $712.52, which notably trails the stock’s current trading price.
Wells Fargo pushed its target to $870 while maintaining an Overweight designation. Daiwa increased its objective to $790. Jefferies established a $750 target with a Buy rating. Oppenheimer moved to $729 with an Outperform call. Morgan Stanley, conversely, only adjusted upward to $425 while preserving its Underweight stance.
Wall Street Zen downgraded CAT from Buy to Hold on February 21st.
Insider Selling and Short Interest
Some stakeholders are reducing exposure. Executive Denise C. Johnson divested 39,138 shares on February 2nd at an average execution price of $681.08, generating proceeds exceeding $26.6 million. This transaction reduced her stake by 47%.
Executive Bob De Lange subsequently sold 22,656 shares on February 6th at $720.11, collecting approximately $16.3 million. Throughout the past 90-day window, company insiders have collectively sold $98.2 million in CAT stock.
Short interest experienced a dramatic 61% increase during February, indicating heightened bearish sentiment among certain traders anticipating a price correction.
Institutional ownership of CAT stands at 70.98%. Erste Asset Management expanded its position by 32.7% during Q3, purchasing an additional 33,634 shares. Norges Bank established a fresh position valued above $2.1 billion in Q2.
CAT’s 52-week trading range spans from $267.30 to $789.81. The equity trades at a P/E multiple of 40 with a market capitalization of $350.27 billion. The upcoming quarterly dividend is scheduled at $1.51 per share, equating to an annualized payout of $6.04 and a yield of 0.8%.
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