Caterpillar (CAT) - Company Research

Last Updated: 22 August 2026

Caterpillar has spent a century selling machines that dig, haul and pave. In 2026 the market is valuing it as a power company. The renamed Power & Energy segment is now the largest part of the business, order backlog has almost doubled in twelve months to a record 72 billion dollars, and the share price has roughly doubled over the same period on the back of demand for large reciprocating engines and gas turbines to feed AI data centres. This report sets out what the filings actually say, on a reported-numbers basis only, with no analyst opinions or price targets.

1. Company Snapshot

Field	Value
Company	Caterpillar Inc.
Ticker / Exchange	CAT, New York Stock Exchange
Sector	Industrials — construction and mining machinery, engines, turbines
Share price	$827.90 (close, 21 August 2026)
Market cap	~$380.6bn (459,674,889 shares at the 21 August 2026 close)
Revenue (FY2025)	$67,589m total sales and revenues, up 4.3% year on year — the highest in company history
Revenue (trailing twelve months to 30 Jun 2026)	$74,729m
Net profit (FY2025)	$8,884m attributable to shareholders; GAAP diluted EPS $18.81
CEO / Leadership	Joseph E. (Joe) Creed, Chairman and Chief Executive Officer — CEO from 2025, Chairman from 2026. Chief Financial Officer Kyle J. Epley, effective 1 May 2026
Employees	Approximately 118,000 full-time as at 31 December 2025 (~51,600 in the US, ~66,400 outside)
Headquarters	Irving, Texas, United States
Backlog	$72bn at 30 June 2026, up roughly 92% year on year
Dividend	$1.63 per share quarterly ($6.52 annualised); 32 consecutive years of higher annual dividends
Latest reported period	Q2 2026, released 4 August 2026

Sources: Q2 2026 results release, FY2025 Form 10-K.

2. Bull Case vs Bear Case

Bull Case

• A genuine structural demand shock in power: Power Generation sales rose 29% in Q2 2026, driven by large reciprocating engines and turbines going into data centre applications, and Caterpillar has publicly named six separate contracts of at least one gigawatt each.
• Backlog gives unusual visibility: $72bn at 30 June 2026 against $30.0bn at the end of 2024, with some Power & Energy customers ordering out to 2030 and lead times on certain products stretching into 2028 and 2029.
• The aftermarket is the quiet compounder: FY2025 services revenues of $24bn were roughly 37.5% of machinery, power and energy sales — recurring parts and service income that is far less cyclical than the machines themselves.
• A distribution moat that cannot be bought: 150 independent dealers, 41 in the United States and 109 elsewhere, serving 190 countries, supported by more than 1.6 million connected reporting assets.
• Capital return at scale: $7.9bn returned in FY2025 and a further $7.9bn in the first half of 2026 alone, alongside a 32-year record of consecutive annual dividend increases.

Bear Case

• The re-rating rests on a single narrative: the shares have roughly doubled in twelve months and trade on about 35 times trailing GAAP earnings. Power & Energy is now around 48% of revenue, so a slowdown in hyperscaler capital spending hits both the earnings and the multiple at once.
• Tariff accounting flatters the latest quarter: Q2 2026 operating profit includes $392m of expected tariff recoveries that are an estimate of a refund process, not cash received, while the company still expects $2.2bn to $2.4bn of tariff cost in 2026.
• Dealer inventory is a swing factor that reverses: Construction Industries grew 35% in Q2 2026 partly on dealer inventory movements, and management has guided that dealer inventory will be a headwind to volume in the second half.
• The finance arm carries real leverage: Financial Products holds roughly $34.5bn of debt against $25.2bn of finance receivables on about $5.2bn of equity, so a customer credit cycle would hurt Caterpillar twice over.
• Insiders have been heavy sellers: roughly 101,000 shares were sold for about $96m in the six months to August 2026 against a single 250-share purchase, with eight of those sales clustered in nine days in early May near the 52-week high.

3. Business Segments

Caterpillar reorganised its reporting during 2025 and again with effect from 1 January 2026. The former Energy & Transportation segment was renamed Power & Energy, and from 1 January 2026 the Rail division moved out of Power & Energy into Resource Industries. The table below is on the FY2025 basis as originally reported, which still has Rail inside Power & Energy.

Segment	% of revenue	What it is
Power & Energy	47.6% ($32,201m)	Reciprocating engines, gensets, integrated power systems, Solar Turbines industrial gas turbines and turbine services, electrified powertrain and remanufacturing, serving oil and gas, power generation, marine, rail and industrial customers
Construction Industries	37.1% ($25,060m)	Excavators, wheel loaders, backhoes, track-type tractors, pavers, compactors, telehandlers and skid steers for infrastructure, building construction, rental and quarry customers
Resource Industries	18.4% ($12,434m)	Surface and underground mining and heavy construction — large mining trucks, electric rope shovels, draglines, hydraulic shovels and rotary drills, plus fleet management and autonomy technology. Houses the Rail division from 1 January 2026
Financial Products	5.3% ($3,609m external)	Cat Financial retail and wholesale financing and leasing for customers and dealers, plus Caterpillar Insurance Holdings. Segment revenues were $4,220m before eliminations
All Other Segment	0.5% ($348m)	Non-reportable activities including the company-owned Japanese dealer, Nippon Caterpillar Division, which covers roughly 80% of that market

Segment percentages are calculated against consolidated sales and revenues of $67,589m and therefore sum to more than 100%, because corporate items and inter-segment eliminations of $(6,063)m are excluded. The reconciliation is $25,060m plus $12,434m plus $32,201m plus $348m less $6,063m, giving $63,980m of machinery, power and energy sales, plus $3,609m of Financial Products revenues.

By region, FY2025 sales and revenues split into North America $36.6bn, Europe, Africa and the Middle East $12.8bn, Asia Pacific $11.2bn and Latin America $7.0bn. Some 51% of sales were outside the United States.

4. Business Model & Moat

How it makes money. Caterpillar runs two economically different businesses and separates them in its own reporting. Machinery, Power & Energy designs, manufactures and sells machines, engines, turbines and locomotives, plus the aftermarket that follows them — $63,980m of sales in FY2025. Financial Products, principally Cat Financial, lends to the customers and dealers who buy those machines and earns net interest and lease income, contributing $3,609m of external revenues. Treating the two as one business distorts almost every ratio, which is why the debt discussion in Section 6 separates them.

The aftermarket annuity. Machines are sold once; parts, service, rebuilds and connected-asset subscriptions are sold for decades. FY2025 services revenues were $24bn, roughly 37.5% of machinery, power and energy sales. At its investor day on 2 May 2019 the company set a goal of roughly doubling 2016 services revenue of about $14bn to about $28bn by 2026; the FY2025 outturn of $24bn leaves it short of that target entering the target year.

The dealer network. Distribution is the hardest part of the business to replicate. Caterpillar sells through 150 independent dealers — 41 in the United States and 109 outside — covering 190 countries, with Perkins engines going through a further 86 distributors and FG Wilson through 108. Dealers are contractually required to promote Caterpillar products, employ adequate sales and support staff and keep detailed books available to the company. Turbines and locomotives are sold direct.

Installed base and data. More than four million Cat products are at work worldwide and more than 1.6 million are connected reporting assets, feeding a service and parts business that competitors without the same fleet cannot match. Research and development spending was $2,148m in FY2025.

5. Financial Health

Fiscal Year	Revenue ($m)	YoY %	GAAP EPS	Adjusted EPS	Dividend/share	Long-term debt (YE)
FY2021	50,971	+22.1%	$11.83	$10.81	$4.36	$26,033m
FY2022	59,427	+16.6%	$12.64	$13.84	$4.71	$25,714m
FY2023	67,060	+12.8%	$20.12	$21.21	$5.10	$24,472m
FY2024	64,809	−3.4%	$22.05	$21.90	$5.53	$27,351m
FY2025	67,589	+4.3%	$18.81	$19.06	$5.94	$30,696m

Revenue and EPS figures are taken from the fourth-quarter and full-year earnings releases. Dividend per share is dividends declared, and long-term debt is long-term debt due after one year at each year end; both were re-derived directly from Caterpillar's SEC XBRL company facts to avoid transcription error. Long-term debt on this consolidated basis is dominated by Cat Financial — see Section 6.

Quarter / Half	Revenue	Adjusted EPS	GAAP EPS
Q2 2026 (to 30 Jun 2026)	$20,543m	$8.17	$7.77
Q1 2026 (to 31 Mar 2026)	$17,415m	$5.54	$5.47
Q4 2025 (to 31 Dec 2025)	$19,133m	$5.16	$5.12
Q3 2025 (to 30 Sep 2025)	$17,638m	$4.95	$4.88
Q2 2025 (to 30 Jun 2025)	$16,569m	$4.72	$4.62
FY2025 total	$67,589m	$19.06	$18.81

Q2 2026 was the first quarter in Caterpillar's history to exceed $20bn of sales and revenues, up 24% year on year, with an adjusted operating margin of 21.9%. That figure includes $392m of expected tariff recoveries; excluding them, margin would have been roughly 190 basis points lower.

Cash generation. FY2025 operating cash flow was $11,739m against total capital expenditure of $4,286m ($2,821m of property, plant and equipment plus $1,465m of equipment leased to others), giving free cash flow of about $7,453m. Depreciation and amortisation was $2,262m. In the first half of 2026, operating cash flow rose to $6,241m from $4,411m, capital expenditure was $2,162m and depreciation and amortisation was $1,211m.

Balance sheet at 30 June 2026. Cash and cash equivalents $6,713m, down from $9,980m at the end of 2025 after $6,522m of share repurchases in six months. Inventories $20,627m, total assets $102,609m and total shareholders' equity $19,394m. Equity is falling because of buybacks, not losses: treasury stock rose from $49,539m to $54,533m over the half.

6. Valuation Metrics

Raw metrics, August 2026. Not opinions on whether the stock is cheap or expensive.

Metric	Value
Share price	$827.90 (close, 21 August 2026)
Market cap	~$380.6bn (459,674,889 shares at $827.90)
Trailing P/E (GAAP)	~35.6x (price $827.90 / trailing twelve month GAAP diluted EPS $23.24, being Q3 2025 $4.88 + Q4 2025 $5.12 + Q1 2026 $5.47 + Q2 2026 $7.77). On trailing adjusted EPS of $23.82 the same calculation gives ~34.8x
P/E (forward)	~25.6x on a consensus forward EPS estimate of about $32.28. Caterpillar itself does not publish an EPS forecast; its FY2026 guidance is for mid-to-high-teens percentage sales growth, which implies roughly $78bn to $80bn of revenue
P/S (TTM)	~5.1x (market cap ~$380.6bn / trailing twelve month revenue $74,729m)
Enterprise value	~$419.0bn on a consolidated basis (market cap $380.6bn + total debt $45,146m − cash $6,713m at 30 June 2026). On an industrial-only basis, using machinery, power and energy debt of $10,690m instead of consolidated debt, enterprise value is ~$384.5bn. The consolidated figure is inflated by Cat Financial's $34,456m of funding, which is matched against $25,208m of finance receivables and is not industrial leverage
EV/EBITDA (TTM)	~27.1x consolidated, or ~24.9x on the industrial-only enterprise value. EBITDA of $15,471m is trailing twelve month operating income of $13,092m plus depreciation and amortisation of $2,379m, both derived from the cash flow statement and income statement. Note that trailing operating income includes the $392m of expected tariff recoveries booked in Q2 2026
P/FCF	~42.3x (market cap ~$380.6bn / free cash flow $8,994m; free cash flow = trailing operating cash flow $13,569m − trailing total capital expenditure $4,575m, the latter including equipment leased to others)
Price/book	~19.6x (shareholders' equity $19,394m at 30 June 2026, about $42 per share). This is heavily distorted by $54.5bn of accumulated treasury stock from decades of buybacks and is of limited use here
52-week high	$1,073.46
52-week low	$410.52
Short interest (% of float)	1.66% (6,854,115 shares against a float of 458,222,316), settlement date 31 July 2026
Days to cover	2.24
Dividend yield	~0.79% ($6.52 annualised against $827.90). The yield is low by Caterpillar's own history because the share price has roughly doubled in twelve months, not because the dividend has slowed

Market data was pulled live on 22 August 2026. Balance sheet and cash flow inputs are from the Q2 2026 results release and the FY2025 Form 10-K, re-derived from SEC XBRL company facts.

You can track CAT against its peers on our Live Charts page, and check the macro releases that move industrial demand on the Economic Calendar.

7. What Are They Building

Data centre power. This is the defining growth story of 2025 and 2026. Q2 2026 Power Generation sales were $3,098m, up 29% year on year, driven by large reciprocating engines and by turbines and turbine-related services going primarily into data centre applications. Caterpillar has raised its 2030 large reciprocating engine capacity plan from roughly twice to nearly three times 2024 levels, and lifted its Power Generation sales growth target to more than three times by 2030. It is also restarting production of a 10-megawatt medium-speed gas reciprocating engine platform, restoring about 1.5 gigawatts of capacity, with shipments beginning in Q4 2026 followed by an eighteen-month ramp.

Named gigawatt-scale agreements disclosed to date include a strategic alliance with American Intelligence & Power and Boyd CAT to deploy 2 gigawatts of dedicated power for hyperscale AI infrastructure, a 2.1 gigawatt five-year framework agreement with ProPetro's PROPWR, 2 gigawatts of gas gensets plus battery storage for the Monarch Compute Campus with deliveries from September 2026 to August 2027, and roughly 2 gigawatts of onsite power at a West Virginia data centre campus tied to Microsoft and NVIDIA. Caterpillar also announced a collaboration with Vertiv in November 2025 on energy optimisation for AI data centres.

Autonomy. The autonomous haul truck fleet expanded to 827 trucks in operation during 2025, and Caterpillar signed its first customer agreement for a mixed-fleet autonomy solution. The technology has moved beyond mining into quarrying, with more than two million tons hauled autonomously at Luck Stone's Bull Run Quarry. At CES 2026 the company showed autonomous excavators, haul trucks and site systems.

Electrification and alternative power. Caterpillar has demonstrated a battery-electric large mining truck and introduced a dynamic energy transfer solution for battery and diesel-electric mining equipment. Resource Industries markets diesel-electric, battery-electric, hybrid and alternative-fuel machines.

Digital. More than 1.6 million connected reporting assets at the end of 2025, with the Cat AI Assistant, VisionLink, a Cat Compact retail format and a refreshed Cat Rentals digital experience introduced across 2025 and 2026.

8. Competitive Landscape

Peer	Market cap (August 2026)	Key 2025 metric
Deere & Company (DE)	~$174.9bn	FY2025 worldwide net sales and revenues $45.68bn, down 12% year on year; net income $5.027bn
Cummins (CMI)	~$81.1bn	FY2025 revenues $33.67bn, down about 1% year on year; net income $2.84bn
Volvo Group (VOLV-B)	~$73.7bn (SEK 697bn)	FY2025 net sales SEK 479.2bn, down from SEK 526.8bn; adjusted operating margin 10.7%
Komatsu (6301)	~$39.5bn (JPY 6,278bn)	Revenue of JPY 4,132.8bn for the year ended 31 March 2026, up 0.7%; net income JPY 376.4bn, down 14.4%
CNH Industrial (CNH)	~$19.1bn	FY2025 consolidated revenues $18.10bn, down 9% year on year; net income $510m
Terex (TEX)	~$7.6bn	FY2025 net sales $5.42bn, up 5.7% on $5.13bn in FY2024; net income $221m

Market capitalisations were pulled live on 21 and 22 August 2026 and converted at spot rates of 0.006292 US dollars per yen, 0.105684 per Swedish krona. Peer revenue and net income figures were taken from each company's own annual income statement. At roughly $381bn, Caterpillar is worth more than twice Deere and more than the other five peers on this list combined — a gap that has opened up almost entirely over the past twelve months.

Caterpillar's own Form 10-K names a far wider competitive set, including Doosan Bobcat, Hitachi Construction Machinery, JCB, Kobelco, Kubota, Sany, XCMG and Liebherr in machines; Rolls-Royce Power Systems, Siemens Energy, GE Vernova, INNIO, Generac and Weichai in engines and power generation; and Wabtec, Alstom and Siemens Mobility in rail.

9. Insider Activity

Chairman and Chief Executive Officer Joe Creed sold 2,500 shares on 5 March 2026, his only open-market disposal in the period. Insiders overall have been overwhelming net sellers: roughly 101,000 shares were sold for approximately $96.2m in the six months to 22 August 2026, against a single purchase of 250 shares for $219,210 — a ratio of about 440 to one by value. Eight of those sales fell within a nine-day window in early May 2026 at prices between $876 and $926, close to the 52-week high, and shortly after the change of Chief Financial Officer.

Name	Date	Type	Shares	Price	Value	Plan Type
Denise C. Johnson, Group President	14 May 2026	Sale after option exercise	12,605	$907.91	$11,444,170	Not disclosed
Bob De Lange, Group President	6 May 2026	Sale after option exercise	24,222	$922.92	$22,354,978	Not disclosed
Anthony D. Fassino, Group President	11 May 2026	Sale after option exercise	16,283	$916.80	$14,928,266	Not disclosed
Andrew R. J. Bonfield, CFO Emeritus	6 May 2026	Sale after option exercise	15,674	$918.71	$14,399,861	Not disclosed
Rodney M. Shurman, Group President	5 May 2026	Sale after option exercise	5,639	$903.18	$5,093,006	Not disclosed
Jason Kaiser, Group President	4 May 2026	Sale after option exercise	5,642	$883.03	$4,982,055	Not disclosed
Joseph E. Creed, Chairman and CEO	5 Mar 2026	Open-market sale	2,500	$718.93	$1,797,317	Not disclosed
David Maclennan, Director	4 May 2026	Open-market purchase	250	$876.84	$219,210	Not disclosed

Transactions are taken from SEC Form 4 filings. Most of the disposals are flagged as sales following option exercise, which is a different act from a discretionary sale of existing holdings. Whether any were made under a Rule 10b5-1 trading plan is not stated in the filing index reviewed, so the plan type is shown as not disclosed rather than assumed.

10. Key Risks

• Tariffs and trade policy: Caterpillar expects $2.2bn to $2.4bn of tariff cost in 2026 and incurred $400m in Q2 2026 alone. It has booked $392m of expected recoveries that depend on the US Customs and Border Protection refund process being honoured — an estimate rather than cash in hand. The Form 10-K separately warns that more restrictive trade policies and retaliation could hurt the business.
• Concentration in the data centre power cycle: Power & Energy is now the largest segment at roughly 48% of FY2025 revenue, and the company is committing capital to nearly triple large-engine capacity by 2030 and restart a retired platform. If hyperscaler spending decelerates, Caterpillar carries structurally higher fixed costs against an order book taken at peak demand.
• Construction cycle and dealer inventory: management has guided that Construction Industries dealer inventory will be a headwind to sales volume in the second half of 2026, with a typical fourth-quarter drawdown. The 10-K lists dealer inventory management and sourcing practices as a standalone risk factor.
• Mining capital expenditure cycle: Resource Industries is the weakest of the three primary segments, with a Q2 2026 margin of 14.9% against 24.6% at Power & Energy, and FY2025 sales of $12.4bn that were broadly flat. Mining orders are long-cycle and depend on commodity prices.
• Cat Financial credit exposure: Financial Products carries about $34.5bn of debt and $44.0bn of total assets on roughly $5.2bn of equity. Credit quality is currently sound, with past dues of 1.31% at 30 June 2026 against 1.62% a year earlier, but the provision for credit losses rose year on year in the quarter and a customer downturn would hit both equipment volumes and the loan book.
• Capacity and execution risk on the ramp: lead times on some Power & Energy products already run into 2028 and 2029, and the 1.5 gigawatt restart carries an eighteen-month ramp during which costs are absorbed ahead of shipments. Q2 2026 already showed $149m of unfavourable manufacturing costs at Power & Energy and $158m at Resource Industries.
• Currency and geographic spread: 51% of FY2025 sales were outside the United States. Q2 2026 benefited from $199m of favourable currency plus further gains in other income — a tailwind that can reverse.
• Competition and pricing: FY2025 saw $0.8bn of unfavourable price realisation even as volumes rose, against global competitors including Komatsu, Volvo, Deere, Sany and XCMG in machines and Cummins, GE Vernova and Siemens Energy in power.

11. Recent Developments

• 05 Mar 2026 — Chief Executive sells shares. Chairman and CEO Joe Creed disposed of 2,500 shares at $718.93, a transaction worth about $1.80m and his only open-market sale of the period.
• 08 Apr 2026 — Chief Financial Officer transition announced. Andrew Bonfield will retire effective 1 October 2026 after eight years, with 29-year company veteran Kyle Epley appointed Chief Financial Officer with effect from 1 May 2026.
• 30 Apr 2026 — Q1 2026 results and a capacity upgrade. Revenue rose 22% to $17.4bn with GAAP EPS of $5.47 and adjusted EPS of $5.54, backlog reached a then-record $63bn, and Caterpillar raised its 2030 large-engine capacity plan from roughly two times to nearly three times 2024 levels while disclosing the 2.1 gigawatt ProPetro framework agreement.
• 04 May 2026 to 14 May 2026 — Cluster of executive share sales. Eight Form 4 disposals by group presidents and the outgoing Chief Financial Officer totalled roughly $83m at prices between $876 and $926, alongside a single 250-share purchase by director David Maclennan.
• 10 Jun 2026 — Dividend raised 8%. The board lifted the quarterly dividend by 12 cents to $1.63 per share, payable 19 August 2026 to holders of record on 20 July 2026, marking the 32nd consecutive year of higher annual dividends.
• 04 Aug 2026 — First $20bn quarter and raised guidance. Q2 2026 sales and revenues of $20,543m were up 24%, GAAP EPS was $7.77 and adjusted EPS $8.17 against a consensus near $6.19, backlog hit $72bn, and full-year guidance was lifted to mid-to-high-teens revenue growth with free cash flow now expected in the top half of the $6bn to $15bn target range.
• 04 Aug 2026 — Tariff cost estimate cut and recoveries booked. Caterpillar reduced its expected 2026 tariff cost to $2.2bn to $2.4bn from about $2.6bn and recognised $392m of expected recoveries after a Supreme Court ruling on tariffs authorised under the International Emergency Economic Powers Act and the opening of a customs refund claim system.
• 04 Aug 2026 — Engine platform restart confirmed. On the results call management confirmed it is restarting the 10-megawatt medium-speed gas reciprocating engine platform, restoring roughly 1.5 gigawatts of capacity, with shipments from Q4 2026 and an eighteen-month ramp.
• 18 Aug 2026 — Shares consolidate below the high. With the stock up around 113% over twelve months but roughly 9% to 10% below its 52-week high and down about 10% over the prior month, market attention turned to whether the data-centre-driven re-rating can be sustained.

12. Key Dates to Watch

• Expected 4 Nov 2026 — Q3 2026 results. Aggregator listings show this date but Caterpillar's own earnings advisory had not been published at the time of writing, and its recent pattern has been a Wednesday in late October.
• Expected Oct 2026 — ex-dividend and record dates for the next quarterly dividend of $1.63 per share, based on the established quarterly rhythm.
• 01 Oct 2026 — Andrew Bonfield's retirement takes effect, completing the Chief Financial Officer transition to Kyle Epley.
• Expected Nov 2026 — payment of the next quarterly dividend at $1.63 per share.
• Expected Dec 2026 — first shipments of the restarted 10-megawatt gas reciprocating engine platform, beginning an eighteen-month capacity ramp.
• Expected Jan 2027 — FY2026 full-year results. The FY2025 results were released on 29 January 2026.
• Expected Jun 2027 — annual meeting of shareholders and the board's customary review of the quarterly dividend rate, which has been raised each June since 2023.
• Expected Aug 2027 — completion of Monarch Compute Campus deliveries of 2 gigawatts of gensets and battery storage, which began in September 2026.

Beyond these scheduled events, the customs refund claim process for tariffs paid under the International Emergency Economic Powers Act is ongoing, and the timing of any recovery beyond the $392m already booked has not been disclosed. No investor day has been announced for 2026 or 2027.

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