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 45.2× TTM earnings — roughly in line with its Industrials sector average of 49.1×.

The Numbers

P/E (TTM)

45.2×

Sector avg: 49.1×

P/S (TTM)

6.4×

Sector avg: 3.7×

Market Cap

$411.92B

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 $880.22 45.2×
GE $348.74 42.8×
BA $214.09 86.3×
UPS $117.71 18.2×

Is the Multiple Justified?

July 12, 2026

Caterpillar Inc.'s P/E ratio of 48.9x is closely aligned with the Industrials sector average of 50.0x. This valuation suggests that the market perceives Caterpillar's performance and future prospects to be largely in line with its industrial peers. The company, a leading manufacturer of construction and mining equipment, diesel and natural gas engines, industrial gas turbines, and diesel-electric locomotives, typically benefits from global infrastructure spending and commodity cycles. While specific recent earnings data was not provided, its valuation near the sector average likely reflects a balance between stable demand for its heavy machinery and services, and the inherent cyclicality of the industrial sector. Factors such as global economic growth, commodity prices, and government infrastructure initiatives are key drivers that influence its performance and, consequently, its valuation relative to the broader industrial market.

Sources

Frequently Asked Questions

Is CAT overvalued or undervalued?
On trailing-twelve-month earnings, CAT trades at 45.2x versus a Industrials sector average of 49.1x in our coverage — a 8% 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

GE BA UPS