Caterpillar Forecasts Lifted as Q4 Sales Jump 18% to $19.1B, EPS Tops by $0.50
Caterpillar reported fourth-quarter 2025 revenue of $19.133 billion, up 18% year-over-year, and adjusted EPS of $5.16, topping estimates by $0.50. Following the results, Wolfe Research raised its target to $670, Bank of America to $708 and Wells Fargo to $702.
1. Caterpillar Reports Strong Q4 2025 Results
Caterpillar delivered fourth-quarter sales and revenues of $19.133 billion, up 18% from $16.215 billion a year earlier, surpassing analyst projections of $17.851 billion. Adjusted earnings per share reached $5.16, topping estimates of $4.66, while GAAP profit per diluted share was $5.12 versus $5.78 in Q4 2024. Operating profit declined 9% to $2.660 billion, and operating margin contracted to 13.9% from 18.0% in the prior year, reflecting higher manufacturing costs and restructuring expenses. CEO Joe Creed highlighted a record backlog and strong momentum entering 2026, with net margin at 14.34% and return on equity at 47.16%. The board also declared a quarterly dividend of $1.51 per share, payable February 19 to holders of record January 20, representing a $6.04 annualized payout and a 31.01% payout ratio.
2. Analysts Raise Forecasts Following Earnings Beat
In the wake of the earnings release, Wolfe Research lifted its target price on Caterpillar from $470 to $670 and maintained an outperform rating, while Bank of America increased its objective from $650 to $708 with a buy opinion. Rothschild & Co Redburn raised its target from $420 to $650 and kept a neutral stance, and Wells Fargo & Company bumped its price target from $675 to $702, reiterating an overweight rating. Raymond James Financial reissued a market-perform rating. Of 25 covering analysts, one holds a strong-buy view, sixteen are on buy, seven recommend hold and one a sell, producing a consensus moderate-buy rating with an average target of $640.20.
3. Institutional Investors Adjust Positions
According to the latest SEC filings, Alpha Cubed Investments LLC trimmed its stake in Caterpillar by 1.5%, selling 2,447 shares to finish the quarter with 160,764 shares valued at $76.709 million, making it the firm’s 14th largest holding at 2.7% of its portfolio. Pacific Point Advisors LLC initiated a new position worth $579,000, while Brighton Jones LLC boosted its holdings by 51.5% to 7,409 shares valued at $2.688 million. LBP AM SA upped its stake by 8.2% to 3,835 shares ($1.489 million), PFG Investments LLC added 1.7% to reach 6,229 shares ($2.418 million), and Trilogy Capital Inc. grew its position by 6.3% to 762 shares ($296,000). Institutional investors now own 70.98% of the company’s outstanding shares.