The Zacks Analyst Blog Highlights Caterpillar, Terex and Komatsu

For Immediate Release

Chicago, IL – August 7, 2025 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: Caterpillar Inc. CAT, Terex Corp. TEX and Komatsu Ltd. KMTUY.

Here are highlights from Wednesday’s Analyst Blog:

Caterpillar Sees Volume Rebound in Q2: Is the Worst Finally Over?

Caterpillar Inc. reported a turnaround in volume performance in the second quarter of 2025, with a net volume increase of $237 million. This marks a significant recovery after six straight quarters of volume declines. The rebound was largely driven by a $326 million boost in the Energy & Transportation (E&T) segment, which offset volume declines of $83 million in Construction Industries and $13 million in Resource Industries.

The Construction Industries segment has seen negative volume growth in seven straight quarters while Resource Industries’ volumes have been in the red in the past eight quarters. Even though these segments reported negative volume growth in the second quarter of 2025, the declines were less severe compared with previous quarters, signaling a potential bottoming out.

In 2024, CAT reported a total volume decline of $3.5 billion, followed by a further $1.1 billion decline in the first quarter of 2025. These declines were largely due to sluggish demand and substantial drawdowns in dealer inventories. China’s prolonged real estate slump has also taken a toll, particularly on the demand for large excavators, which are a key product for the Construction Industries segment.

Ongoing macroeconomic uncertainty and tariff-related pressures have further dampened the demand outlook. In July, the U.S. manufacturing sector contracted for the fifth straight month, while the New Orders Index fell for the sixth month in a row.

Despite this environment, Caterpillar’s second-quarter volume recovery is encouraging. The company expects moderate year-over-year sales growth in the third quarter, supported by improved volumes across all three segments.

Industry peers like Terex Corp. and Komatsu Ltd. are also feeling the strain. Terex has seen six straight quarters of negative organic growth in its Material Processing segment due to subdued demand. The company expects this trend to continue through the year. Terex’s Aerial segment fared even worse, with organic growth plunging 31.2% in the second quarter of 2025, following a 27.8% drop in the first quarter.

Komatsu experienced a decline in volumes within its Construction, Mining & Utility Equipment segment during fiscal 2024, which persisted in the first half of fiscal 2025. Komatsu expects demand for construction, mining and utility equipment in fiscal 2025 to remain flat to decrease 5% compared with the fiscal 2024 level.

CAT’s Price Performance, Valuation & Estimates

CAT shares have gained 19.7% so far this year compared with the industry’s 19% growth. In comparison, the Zacks Industrial Products sector has gained 6.5%. The S&P 500 has moved up 6.8% in the same time frame.

Caterpillar is currently trading at a forward 12-month price/earnings (P/E) ratio of 21.35X compared with the industry average of 20.21X.

The Zacks Consensus Estimate for CAT’s 2025 earnings indicates a year-over-year decline of 14.2%. The consensus mark for revenues implies a drop of 2.4% for the year. The earnings estimate for 2026 indicates 13.8% growth, with revenues rising 5.2%.

Earnings estimates for Caterpillar for both 2025 and 2026 have moved up over the past 60 days, as shown in the chart below.

Caterpillar stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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