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 41.0× TTM earnings — roughly in line with its Industrials sector average of 47.0×.

The Numbers

P/E (TTM)

41.0×

Sector avg: 47.0×

P/S (TTM)

5.8×

Sector avg: 3.5×

Market Cap

$373.51B

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 $798.14 41.0×
GE $335.58 41.2×
BA $207.80 83.8×
UPS $104.27 16.1×

Is the Multiple Justified?

August 30, 2026

Caterpillar's P/E of 41.1x, slightly below the industrial sector average of 46.0x, may reflect market considerations of its cyclical business nature despite strong recent performance. The company achieved record Q2 2026 sales and revenues of over $20 billion, a 24% increase year-over-year, with adjusted profit per share jumping 73%. A growing backlog of $72 billion and robust demand, particularly for power generation equipment supporting AI data centers, justify its solid operational results. While the market acknowledges its strong fundamentals and consistent dividend growth, the slight discount could be attributed to broader economic uncertainties impacting industrial demand.

Sources

Frequently Asked Questions

Is CAT overvalued or undervalued?
On trailing-twelve-month earnings, CAT trades at 41.0x versus a Industrials sector average of 47.0x in our coverage — a 12.9% 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 UPS BA