QualityDipJC
Jim CramerOct 1 · TV
bullishAfter a 24% Q3 pullback: "Given that its engines have become a very good source of data center power, this might be a buying opportunity, even though the stock's run huge."
Stocks / Industrials · Machinery & trucks
CAT
Caterpillar CAT
$622.75−3.81% dayFri Oct 30 close
Deep dip with a setup armed: a close above $637.70 triggers it. 42% below its 52-week high.
A quality company trading well above our fair value estimate.
- Fair value est.
- $396.32−36%
- Market Value
- forming
- Off 52-wk high
- −42%
- Risk vs market
- Highbeta 1.88
5 bullish · 5 bearish See why
Fair value est.TriggerStopDrag across the chart to see any day
Key levels
Every level vs today’s $622.75
- Fair value est.base case$396.32−36.4%
- 52-wk lowlowest close, 1 year$546.13−12.3%
- Stopreference, not an order$616.66−1.0%
- PriceFri Oct 30 close$622.75you are here
- Triggerclose above fires the setup$637.70+2.4%
- 52-wk highhighest close, 1 year$1,065+71.0%
Fair value estimate
How the range is computed
Ten-year free-cash-flow DCF. Same 10-year free-cash-flow model as the base: discount rate 9.5% ±1 point and growth 4.4% ±2 points. Bear = 10.5% and 2.4%; bull = 8.5% and 6.4% (both fade to 3%). A model estimate from public filings, not a forecast of where the price will go.
$396.32−36% vs price
Price $622.75
Bear$307.03
Base$396.32
Bull$526.65
Price is above even the bull case.
What the price implies To be worth today’s price, CAT’s free cash flow would need to grow about 13% a year for five years; our estimate uses 4%.
Risk vs market
How risk vs market is measured
One year of daily returns (Oct 30 to Oct 30, 252 sessions). Beta = how much CAT moved for each 1% move in the S&P 500 (SPY); 1.0 moves with the market. Volatility is the yearly standard deviation of daily returns. Past behavior, not a forecast.
High
Swings much more than the market, and its own price swings are 3.1× the S&P 500’s.
- Beta vs S&P 500
- 1.88
- Volatility
- 40% vs 13% SPY
- Correlation SPY
- 0.60
- Correlation QQQ
- 0.62
Bull vs bear
Rule-based from the data on this page, strongest first. Not advice.
Top bullish points 5 of 5
ProfitabilityReturn on equity of 57% over the last 12 months.
GrowthSales grew 18% to $74.7B over the last 12 months vs the 12 months before (SEC filings).
Cash returnsFree cash flow grew 19% over the last 12 months vs the 12 months before.
TechnicalA company that passes our quality screen, now 42% off its 52-week high (deep dip).
SetupA capitulation-reversal setup is armed: a close above $637.70 triggers it, with a reference stop at $616.66.
Top bearish points 5 of 5
ValuationOur DCF fair value estimate is $396.32, 36% below the price.
ValuationP/E of 26.6× is 29% above its own average of 20.5× at the last 3 fiscal year-ends.
ProfitabilityReturn on equity fell 11 points in two fiscal years, to 42% in FY2025.
ProfitabilityOperating margin narrowed to 16.5% in FY2025 from 19.3% in FY2023 (SEC filings).
GrowthDiluted EPS fell 15% to $18.81 in FY2025.
Who’s talking about it
Notable investors, executives, analysts and public figures on Caterpillar in the last 48 hours. Headlines as published, each linked. Their words, not ours.
No notable mentions in the last 48 hours. Checked Nov 1, 9:09 PM ET.
Compare with peers
Closest in size in Industrials
All fundamentals
P/E 26.6 · FCF yield 3.7% · ROE 57%
Valuation
- P/E
- 26.6×3-yr-end avg 20.5× · Industrials median 27.5×
- Price / FCF
- 26.9×
- FCF yield
- 3.7%
- EV / EBITDA
- n/aD&A or debt not tagged in SEC data
- Price / sales
- 3.85×
- Price / book
- 14.85×
- Market cap
- $288Bprice × diluted shares
- Enterprise value
- n/anot reported in its SEC filings
Growth
- Revenue, 12 months
- $74.7B
- Sales growth, 12 months
- +18.4%vs the 12 months before
- Sales growth, 3 yrs
- +4.4%/yrfrom FY2022
- Diluted EPS, 12 months
- $23.22
- EPS growth, last FY
- −14.7%
- Net income, 12 months
- $10.8B
- Net income growth
- +15%12 months vs before
Profitability
- Gross margin
- 34.3%
- Operating margin
- 17.5%
- Net margin
- 14.5%
- FCF margin
- 14.3%
- Return on equity
- 57%
- Return on invested capital
- n/aoperating income, debt, equity or cash not tagged
Balance sheet
- Cash & short-term inv.
- $6.7B
- Total debt
- n/anot reported in its SEC filings
- Net cash
- n/acash or debt not tagged in SEC data
- Debt / equity
- n/adebt or equity not tagged in SEC data
- Interest coverage
- n/ainterest expense not tagged in SEC data
Cash flow & returns
- Free cash flow, 12 months
- $10.7B
- FCF growth, 12 months
- +19%
- Dividend yield
- 0.98%$2.8B paid
- Payout ratio
- 26%
- Buybacks, 12 months
- $7.2B2.5% of market cap
- Share count, 1 year
- −1.9%diluted shares vs a year ago
- Stock-based comp
- $257M
Trailing 12 months to Jun 30, 2026; balance sheet at Jun 30, 2026. From Caterpillar’s SEC filings. Sparklines show up to six fiscal years. n/a means we don’t hold that number, with the reason. How each is computed.
Valuation details
DCF $396.32 · FCF value $503.26
Market ValueForming: thesis-changing filing on Oct 29, needs five trading days
forming
Fair value estimateDCF: ten years of free cash flow per share, discounted
$396.3236% downside
Assumes 4.4% growth for 5 years (revenue grew 4.4% a year FY22–FY25), fading to 3%; 9.5% discount rate, 3% terminal growth. FCF base $23.13 a share (trailing 12 months to Jun 30, 2026), from the 10-Q filed Aug 5, 2026.
FCF valuePrice at a 4% yield on trailing free cash flow ($9.6B)
$503.26price +24%
Setup & signals
Armed · trigger $637.70
TriggerFires on a close above this
$637.70+2.4% from here
StopUnder the Oct 30 panic low
$616.66−1.0% from here
Risk if it triggersTrigger to stop
−3.3%
Momentum & 52-week range
RSI 24 · 5 days −9.4%
$622.75now
52-wk low $546.13high $1,065
Off 52-wk high−41.5%
5 days−9.4%
vs 50-day avg−20.5%
vs 200-day avg−23.1%
RSI (14)24 oversold
Market cap$298B
The business
FCF $9.6B · Sales +24%
- Free cash flow, 12 months$9.6B
- Free-cash-flow yield3.2%
- Free-cash-flow margin12%
- Gross margin33%
- Operating margin18%
- Return on invested capital17%
- Return on equity60%
- Sales growth (latest quarter vs year-ago quarter)+24%
- Net debt / EBITDA2.1×
Investor buzz
1 from investors
Their view, not ours, and not advice. All buzz
Information only, not investment advice. Fair value estimates and talking points are rule-based model output from public data and can be wrong; stop levels are reference points, not orders. How every number is computed.
Get a text when CAT fires a reversal signal
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