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Investing.com - UBS raised its price target on Caterpillar (NYSE:CAT) to $581.00 from $506.00 on Tuesday, while maintaining a Neutral rating on the heavy equipment manufacturer’s stock. Currently trading at $555.44, Caterpillar sits near its 52-week high of $596.21 and appears overvalued according to InvestingPro Fair Value metrics. Analyst targets for the stock range from $380 to $730.
The price target increase follows Caterpillar’s third-quarter earnings beat, which UBS attributed primarily to stronger-than-expected volume growth rather than price-cost dynamics. The Construction Industries (CI) and Energy & Transportation (E&T) segments delivered the most notable upside.
Despite facing a 4% price headwind, Caterpillar’s Construction Industries segment achieved year-over-year margin improvement when excluding tariff impacts, supported by higher retail sales volumes. UBS indicated that Oil & Gas operations likely drove the earnings beat in the Energy & Transportation segment.
Looking ahead, UBS noted that Caterpillar faces easier year-over-year comparisons for its Construction and Oil & Gas businesses in the fourth quarter and first quarter. The firm expects continued growth in these verticals along with Power Generation to maintain positive sentiment.
UBS highlighted remaining questions about Caterpillar’s outlook, including the sustainability of Construction Industries momentum into next year and the potential upside from data centers over the next two to three years.
In other recent news, Caterpillar has reported significant developments that have captured the attention of investors. The company’s third-quarter 2025 financial results exceeded expectations, with adjusted earnings per share of $4.95, surpassing the anticipated $4.55. Revenue also hit a record high of $17.64 billion, outpacing the forecasted $16.76 billion. Following these results, Bernstein raised Caterpillar’s stock price target to $557, citing the strong performance in the power generation segment. BofA Securities also increased its price target to $650, highlighting a positive shift in retail sales. Both firms maintained their respective ratings, with Bernstein at Market Perform and BofA at Buy. Caterpillar’s backlog increased by $2.4 billion to $39.9 billion, indicating a 5% rise in orders quarter-over-quarter. These recent developments reflect Caterpillar’s robust market position and have led to a 12% rise in its stock, showcasing investor confidence.
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