Caterpillar (CAT) Could Be 17% Undervalued As Backlog And Power Demand Build
Caterpillar (CAT) just extended its autonomous hauling partnership with Luck Stone, rolling the technology into two more Virginia quarries after moving more than 3.5 million tons at the initial Bull Run site.
Caterpillar’s share price has eased over the past three months, with a 90 day share price return that declined 18.75%, even as the year to date share price return is up 35.03% and the 1 year total shareholder return is 73.00%. This suggests that long term momentum remains stronger than recent trading indicates.
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Caterpillar appears to be a powerful industrial story, from quarry autonomy to data center engines, even after the recent pullback. The real work now is to determine whether that strength is already fully reflected in the price.
Most Popular Narrative: 17% Undervalued
Caterpillar’s most followed valuation view puts fair value at $970.37 per share, above the recent $808.01 close. This view places a lot of weight on long term infrastructure and power demand rather than the latest share price pullback.
Record backlog growth across all three primary segments, driven by strong global infrastructure demand (particularly in North America, Africa, and the Middle East), positions Caterpillar for above-trend sales growth in late 2025 and into 2026, supporting top-line revenue expansion.
See why 212 investors see Caterpillar as 17% undervalued.
Result: Fair Value of $970.37 (UNDERVALUED)
Still, the bullish Caterpillar narrative can crack if new tariffs bite harder than expected or if heavier discounting persists and keeps a lid on segment margins.
Find out about the key risks to this Caterpillar narrative.
Next Steps
Mixed messages on Caterpillar so far, right. Use the enthusiasm and the caution as a starting point, then sharpen your own view with the 4 key rewards and 1 important warning sign.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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