Caterpillar premium valuation reflects faster sales growth than peers
CAT•Caterpillar’s trailing P/E was 36.0x after a 74.4% 12-month rally, with the premium attributed to faster sales growth than peers. Second-quarter 2026 sales rose 24% to $20.5 billion, and its backlog reached $72 billion, up 92% year on year.
1. Growth and valuation
Caterpillar’s trailing P/E of 36.0x was elevated versus most heavy equipment peers following a 74.4% 12-month rally. The analysis linked the premium to trailing sales growth of 18.4%, compared with Deere’s 8.0%, and operating margins near 17.5%.
2. Quarterly results and outlook
Second-quarter 2026 sales rose 24% to $20.5 billion, with Construction Industries up 35%. Power & Energy dealer retail sales climbed 33%, led by a 72% increase in power generation equipment tied to data center demand. Backlog reached $72 billion, up 92% year on year; the forecast calls for mid-to-high teens sales growth in 2026, with tariff costs seen at $2.2 billion.
