BofA Lifts Caterpillar Price Target to $825 Following Robust Full-Year Performance

TLDR

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BofA increased Caterpillar’s price target from $735 to $825, maintaining its Buy recommendation following impressive 2025 financial results.
The industrial giant delivered $67.6 billion in annual revenue with 4% growth, while its Power & Energy division jumped 23% to $9.4 billion.
CNBC’s Jim Cramer expressed support for CAT’s turbine business but suggested Cummins (CMI) offers better value at current levels.
February saw short positions increase by approximately 61%, while company insiders offloaded more than $98 million in shares during the last quarter.
Trading at roughly 40 times earnings after a 124% annual surge, CAT faces a consensus analyst price target of $712.52 with a “Moderate Buy” average recommendation.

Caterpillar (CAT) has experienced an impressive rally. Shares have climbed 124% during the past year and gained 28% since the beginning of 2025, starting Friday’s session at $752.81.

Caterpillar Inc., CAT

Following the release of Caterpillar’s full-year 2025 financial results, Bank of America wasted no time adjusting its outlook. The investment bank elevated its price objective on CAT from $735 to $825 while reaffirming its Buy recommendation.

BofA’s analysis was clear-cut. Caterpillar is experiencing turbine demand from multiple sectors extending far beyond data center applications, which the firm believes undermines concerns about potential turbine oversupply in the market.

The financial performance supported this thesis. Caterpillar generated $67.6 billion in total revenue throughout 2025, representing a 4% year-over-year improvement. The Power & Energy division emerged as the star performer, expanding 23% to achieve $9.4 billion in sales.

Fourth-quarter performance was equally impressive. The company delivered earnings per share of $5.16 for the period, surpassing the analyst consensus of $4.67. Revenue reached $19.13 billion, significantly exceeding projections of $17.81 billion. This represented a 17.9% increase compared to the corresponding quarter one year prior.

Jim Cramer recently shared his thoughts on CAT, stating plainly, “We like their stuff.” He highlighted turbines and power equipment as the foundation of the optimistic investment thesis.

However, Cramer also expressed some reservation. When a club member inquired in January about entering a position, he noted the stock had already experienced a substantial appreciation and said he’d prefer to see a pullback before adding exposure. He indicated he currently finds Cummins (CMI) more attractive than CAT at present valuations.

Cramer also offered criticism regarding retail investor participation, suggesting that Caterpillar’s leadership team should be working harder to engage individual investors — and questioning why an iconic American corporation trades at $749.

Analyst Ratings Split

The overall analyst community remains divided. CAT currently has sixteen Buy ratings, seven Hold ratings, and one Sell rating. The average price target stands at $712.52, which actually falls below the stock’s current trading level.

Wells Fargo pushed its target to $870 alongside an Overweight rating. Daiwa elevated its projection to $790. Jefferies established a $750 target with a Buy recommendation. Oppenheimer moved to $729 with an Outperform rating. Morgan Stanley, however, only increased its target to $425 while maintaining an Underweight stance.

Wall Street Zen downgraded CAT from Buy to Hold on February 21st.

Insider Selling and Short Interest

Not all market participants are bullish. Executive Denise C. Johnson divested 39,138 shares on February 2nd at an average price of $681.08, totaling more than $26.6 million. This transaction represented a 47% reduction in her stake.

Insider Bob De Lange executed his own sale on February 6th, offloading 22,656 shares at $720.11 for approximately $16.3 million. Throughout the past 90 days, company insiders have collectively sold $98.2 million worth of shares.

Short interest also surged roughly 61% during February, indicating that some market participants are positioning for a decline.

Institutional investors control 70.98% of CAT’s outstanding shares. Erste Asset Management expanded its stake by 32.7% in Q3, purchasing 33,634 shares. Norges Bank established a new position valued at more than $2.1 billion in Q2.

CAT’s 52-week trading range extends from $267.30 to $789.81. The stock currently trades at a P/E ratio of 40 with a market capitalization of $350.27 billion. The upcoming quarterly dividend is $1.51 per share, translating to an annualized distribution of $6.04 and a yield of 0.8%.

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