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Investing.com - BofA Securities raised its price target on Caterpillar (NYSE:CAT) to $495 from $460 while maintaining a Buy rating on the heavy equipment manufacturer. The stock, currently trading at $434.23, has delivered an impressive 35% return over the past year and sits just 1% below its 52-week high of $441.15.
The price target increase comes despite Caterpillar reporting quarterly adjusted earnings per share of $4.72, slightly below consensus estimates of $4.88, according to BofA Securities.
The firm noted that Caterpillar faces headwinds from tariffs that are larger than expected, while pricing remains a drag with Construction Industries down 7%.
Despite these challenges, BofA highlighted several positive indicators, including Caterpillar’s backlog increasing by $2.5 billion to a record $37.5 billion, dealer machine inventories declining by $400 million, and slightly positive retail sales and end-user metrics.
While BofA’s 2025 guidance implies no upgrades to consensus estimates this year, the firm sees "an exit rate into 2026 that is positive" as the company absorbs peak challenges in the second half of 2024 through 2025 before all three Caterpillar segments shift into growth mode in 2026.
In other recent news, Caterpillar Inc. reported its Q2 2025 earnings, showing a mixed financial outcome. The company posted earnings per share (EPS) of $4.72, which did not meet the anticipated $4.90. However, Caterpillar exceeded revenue expectations, reporting $16.6 billion compared to the forecasted $16.27 billion. These results highlight the company’s ability to generate strong revenue despite falling short on EPS. The earnings report reflects a complex financial picture for Caterpillar, with revenue growth but concerns over profitability. The mixed results have drawn attention from investors and analysts alike.
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