Highly Regarded

Is Caterpillar Inc. (CAT) Stock Undervalued or Overvalued?

Trailing-twelve-month multiples vs Industrials sector peers in our coverage

In Line TTM fundamentals · sector averages from covered peers

CAT trades at 49.8× TTM earnings — roughly in line with its Industrials sector average of 52.7×.

The Numbers

P/E (TTM)

49.8×

Sector avg: 52.7×

P/S (TTM)

7.0×

Sector avg: 3.9×

Market Cap

$453.76B

EPS (TTM): $19.48

Revenue (TTM)

$64.67B

Net income: $9.27B

Industrials Peer Comparison

How CAT's multiples stack up against sector peers we cover. Click any peer for its own valuation breakdown.

Stock Price P/E (TTM)
CAT This page $969.62 49.8×
GE $378.56 46.5×
BA $234.50 94.6×
UPS $110.00 17.0×

Is the Multiple Justified?

July 6, 2026

Caterpillar's P/E of 49.8x is slightly below the Industrials sector average of 52.0x. The company reported a strong start to 2026, with Q1 sales and revenues increasing 22% year-over-year to $17.4 billion. Adjusted EPS rose 30.4% year-over-year to $5.54. Caterpillar's adjusted operating margin was 18.0% in Q1, slightly down from the prior year, partly due to tariff-related costs. The company holds a record backlog of $62.7 billion, providing strong revenue visibility. Management raised full-year 2026 sales guidance to low double-digit growth and plans to triple large reciprocating engine capacity by 2028, driven by demand from AI data centers. Its earnings growth rate of 14.6% annually surpasses the Machinery industry average of 8%.

Sources

Frequently Asked Questions

Is CAT overvalued or undervalued?
On trailing-twelve-month earnings, CAT trades at 49.8x versus a Industrials sector average of 52.7x in our coverage — a 5.5% discount. Whether that's justified depends on growth, margins, and risk; see the context above.
What does the P/E ratio tell you?
Price-to-earnings compares a company's share price with its per-share profits. A higher multiple means investors pay more per dollar of earnings — often for faster expected growth — while a lower one can signal slower growth or higher perceived risk.
Why compare against the sector average?
Valuation multiples vary structurally between industries — software typically trades richer than banks or energy. Comparing CAT with its own Industrials peers is more informative than comparing against the whole market.
Is a cheap stock automatically a good buy?
No. A discount can be justified by weak growth or elevated risk (a "value trap"), and a premium can be earned by quality and consistency. Valuation is one input — pair it with the fundamentals and the AI context on this page.

Methodology

Multiples are computed from trailing-twelve-month fundamentals (from company filings) and the latest share price: P/E is price ÷ diluted EPS, and P/S is market cap ÷ revenue. Sector averages use the Industrials names in our 50-stock coverage with positive earnings — a deliberately like-for-like, if imperfect, benchmark.

Stocks with negative trailing earnings are compared on price-to-sales instead. Multiples update with prices and fundamentals; AI context refreshes weekly.

Not Financial Advice

This page is for education and information only. Indicators are mechanical calculations, AI commentary can contain errors, and nothing here is a recommendation to buy or sell any security. Do your own research and consider consulting a qualified financial advisor. See our full disclaimer.

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Same question, Industrials peers

BA GE UPS