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 37.8× TTM earnings — roughly in line with its Industrials sector average of 43.2×.

The Numbers

P/E (TTM)

37.8×

Sector avg: 43.2×

P/S (TTM)

5.3×

Sector avg: 3.2×

Market Cap

$344.23B

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 $735.56 37.8×
GE $312.03 38.3×
BA $188.72 76.1×
UPS $97.84 15.1×

Is the Multiple Justified?

October 4, 2026

Caterpillar Inc.'s P/E of 43.4x is closely aligned with the Industrials sector average of 43.5x. The company reported a strong Q2 2026, with sales and revenues increasing 24% to a record $20.5 billion, driven by higher sales volume and favorable pricing. Adjusted profit per share rose to $8.17, significantly beating estimates. Caterpillar is benefiting from robust demand across its primary segments, including construction, mining, and power and energy. A record backlog of $72.1 billion, fueled by strong demand for power generation equipment for data centers, provides significant revenue visibility. The company is also investing $1 billion to expand its compact construction equipment manufacturing capacity, further supporting future growth.

Sources

Frequently Asked Questions

Is CAT overvalued or undervalued?
On trailing-twelve-month earnings, CAT trades at 37.8x versus a Industrials sector average of 43.2x in our coverage — a 12.6% 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

UPS GE BA