Caterpillar (NYSE:CAT) Shares Down 9.3% – Time to Sell?

Shares of Caterpillar Inc. (NYSE:CAT) fell 9.3% during trading on Thursday. The stock traded as low as $631.01 and last traded at $647.2150. 8,134,874 shares changed hands during trading, an increase of 186% from the average session volume of 2,847,313 shares. The stock had previously closed at $713.38.

Key Stories Impacting Caterpillar

Here are the key news stories impacting Caterpillar this week:

• Positive Sentiment: Caterpillar reported third-quarter sales and revenues of approximately $20.7 billion, up 17% year over year, while adjusted earnings per share of $7.20 exceeded the $7.06 consensus estimate. Power-generation sales increased 30%, helped by data-center demand, and the company reported a record $78.1 billion backlog. Caterpillar Reports Third-Quarter 2026 Results
• Positive Sentiment: Truist Financial reaffirmed its “buy” rating, while Citigroup maintained a “buy” rating despite lowering its price target to $800. Both targets remain above the current trading level, suggesting some analysts see substantial long-term upside.
• Neutral Sentiment: Bank of America said Caterpillar’s earnings power remains intact, and analysts expect revenue and EPS growth as the backlog converts. However, the backlog may extend into 2029–2030, meaning investors could wait longer for the full financial benefit.
• Negative Sentiment: Management left its annual growth outlook unchanged and indicated only “moderate” fourth-quarter revenue growth. Investors had expected a stronger forecast or an upgrade, so the unchanged guidance overshadowed the earnings beat. Caterpillar Tops Quarterly Profit View
• Negative Sentiment: Revenue came in slightly below consensus, while tariff expenses and rising inventories added to concerns about costs, demand timing and near-term margins.
• Negative Sentiment: Several firms reduced their targets: Morgan Stanley cut its target to $675 and rated CAT “equal weight,” RBC lowered its target to $722 with a “sector perform” rating, and Truist reduced its target to $1,027. These cuts reinforce concerns that the stock’s premium valuation had become difficult to justify without faster growth.

Analyst Upgrades and Downgrades

Several research analysts have weighed in on the stock. JPMorgan Chase & Co. dropped their price objective on shares of Caterpillar from $1,100.00 to $1,000.00 and set an “overweight” rating on the stock in a research note on Friday. Robert W. Baird set a $970.00 price objective on Caterpillar in a report on Wednesday, August 5th. President Capital initiated coverage on Caterpillar in a report on Friday, September 18th. They set a “buy” rating and a $999.00 price target for the company. Zacks Research downgraded Caterpillar from a “strong-buy” rating to a “hold” rating in a report on Monday, October 5th. Finally, Wall Street Zen lowered shares of Caterpillar from a “buy” rating to a “hold” rating in a research report on Saturday. Fifteen analysts have rated the stock with a Buy rating and twelve have assigned a Hold rating to the stock. According to data from MarketBeat, the company currently has an average rating of “Moderate Buy” and an average price target of $913.96.

Caterpillar Stock Down 3.8%

The stock has a market capitalization of $286.25 billion, a price-to-earnings ratio of 24.43, a price-to-earnings-growth ratio of 1.11 and a beta of 1.58. The company has a debt-to-equity ratio of 1.50, a current ratio of 1.42 and a quick ratio of 0.85. The firm has a 50 day simple moving average of $783.25 and a 200-day simple moving average of $807.52.

Caterpillar (NYSE:CAT) last issued its quarterly earnings results on Thursday, October 29th. The industrial products company reported $7.20 earnings per share for the quarter, beating analysts’ consensus estimates of $7.06 by $0.14. Caterpillar had a net margin of 15.21% and a return on equity of 59.87%. The business had revenue of $20.68 billion during the quarter, compared to analyst estimates of $20.76 billion. During the same quarter last year, the business posted $4.95 earnings per share. Caterpillar’s revenue for the quarter was up 17.3% compared to the same quarter last year. On average, sell-side analysts forecast that Caterpillar Inc. will post 27.74 EPS for the current fiscal year.

Caterpillar Dividend Announcement

The company also recently declared a quarterly dividend, which will be paid on Thursday, November 19th. Stockholders of record on Monday, October 26th will be paid a dividend of $1.63 per share. This represents a $6.52 annualized dividend and a dividend yield of 1.0%. The ex-dividend date of this dividend is Monday, October 26th. Caterpillar’s dividend payout ratio is 25.58%.

Insider Transactions at Caterpillar

In related news, CEO Joseph E. Creed sold 32,401 shares of the firm’s stock in a transaction dated Friday, August 28th. The stock was sold at an average price of $808.98, for a total value of $26,211,760.98. Following the transaction, the chief executive officer owned 34,555 shares in the company, valued at $27,954,303.90. This trade represents a 48.39% decrease in their ownership of the stock. The transaction was disclosed in a legal filing with the Securities & Exchange Commission, which is available at the SEC website. 0.33% of the stock is currently owned by corporate insiders.

Institutional Inflows and Outflows

Several hedge funds have recently modified their holdings of the business. Decker Retirement Planning Inc. grew its position in shares of Caterpillar by 440.0% during the 2nd quarter. Decker Retirement Planning Inc. now owns 27 shares of the industrial products company’s stock valued at $29,000 after acquiring an additional 22 shares during the period. PFS Partners LLC raised its holdings in Caterpillar by 1,750.0% in the 3rd quarter. PFS Partners LLC now owns 37 shares of the industrial products company’s stock worth $30,000 after purchasing an additional 35 shares during the period. Matrix Trust Co lifted its position in Caterpillar by 93.8% during the second quarter. Matrix Trust Co now owns 31 shares of the industrial products company’s stock valued at $33,000 after purchasing an additional 15 shares in the last quarter. Cedar Mountain Advisors LLC lifted its position in Caterpillar by 82.1% during the first quarter. Cedar Mountain Advisors LLC now owns 51 shares of the industrial products company’s stock valued at $36,000 after purchasing an additional 23 shares in the last quarter. Finally, Axiom Investment Management LLC bought a new stake in Caterpillar during the second quarter valued at about $36,000. Institutional investors own 70.98% of the company’s stock.

Caterpillar Company Profile

Caterpillar Inc is a manufacturer of construction, mining, and industrial equipment. Its product portfolio includes excavators, bulldozers, wheel loaders, motor graders, articulated trucks, and other machinery used in construction, infrastructure development, mining, quarrying, forestry, and related industries. The company also produces diesel and natural gas engines, industrial gas turbines, generator sets, and other power-generation and transportation equipment.

Caterpillar operates through businesses focused on construction industries, resource industries, and energy and transportation.