Caterpillar Inc. (NYSE:CAT) reported upbeat earnings for the fourth quarter on Thursday.
For the fourth quarter of 2025, sales and revenues were $19.133 billion, up 18% from $16.215 billion in the prior-year period. Adjusted profit per share was $5.16, beating a $4.66 estimate, while revenue exceeded a $17.851 billion estimate.
BofA Securities analyst Michael Feniger maintains a Buy rating and raised the price forecast from $708 to $735.
The analyst writes that the +7% revenue growth forecast appears conservative given low inventory levels and rising retail sales.
Also, the analyst notes that the company's record $51 billion backlog continues to grow, including a recently booked 2 GW power order.
The company’s Power & Energy portfolio is well-positioned, with channel checks showing it is involved in nearly every major power discussion, the analyst says.
The analyst writes that CAT's next growth phase depends on a recovery in its Machinery segment, and several positive signals are emerging.
The dealer inventories are low after the fourth quarter (-$500M), supporting restocking amid retail sales recovery, mining orders, particularly in copper and quarry, are strong, and construction is gaining share, adds the analyst.
Feniger updated the 2026 EPS estimates to $23 (from $24). The 2027 estimate is more than 10% above consensus.
Price Action: CAT shares are down 1.55% at $654.71 at the last check on Friday.
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