Key Highlights
- Shares of CAT climbed nearly 10% to exceed $890, marking a fresh all-time record following the Q1 report
- Earnings per share reached $5.54 with revenue of $17.4B, surpassing analyst expectations of $4.65 EPS and $16.5B
- Revenue from power generation products jumped 48%, fueled by data center infrastructure growth
- Annual sales growth projections were lifted to a range of 6%–9% through 2030, compared to the previous 5%–7% outlook
- Baird set a new Street-leading price objective at $1,165; Morgan Stanley shifted its rating from Sell to Hold
The heavy equipment giant delivered first-quarter results showing earnings per share of $5.54 against revenue totaling $17.4 billion. Analysts surveyed by Wall Street consensus had anticipated $4.65 per share and $16.5 billion in sales. Shares surged approximately 10% during Thursday’s session, climbing above $890 to establish a new record high.
Heading into Friday’s trading session, CAT had gained 55% since the start of the year and rallied 184% over the trailing 12-month period.
Management also provided improved forward-looking estimates. The company now anticipates annual revenue expansion of 6% to 9% extending through 2030, an upgrade from the previously communicated range of 5% to 7%. Looking specifically at 2026, management expects sales growth in the low double digits, representing an increase from the earlier projection of approximately 7%.
Chief Executive Officer Joe Creed highlighted operational excellence and durable end-market conditions as primary catalysts. Sales from the power generation division expanded by 48%, driven by robust demand for large generator sets and turbine systems deployed in data center facilities.
CAT also disclosed a record order backlog totaling $63 billion, representing approximately 80% growth compared to the same period last year.
Wall Street Analysts Raise Targets
Mig Dobre at Baird lifted his price objective to $1,165 from the prior $940 level, establishing the highest target among firms covering the stock. He maintains a Buy rating and designated CAT as a “Fresh Pick” following the earnings release, signaling expectations for near-term upward momentum. This price objective implies roughly 30% additional appreciation from present levels.
Dobre characterized the power generation growth opportunity as remaining in its “early innings,” noting that substantial orders announced recently will be fulfilled across the next five-year timeframe.
He additionally noted that the first quarter represented the strongest order intake period for CAT’s Resource Industries division since 2012.
Morgan Stanley moved its stance on CAT to Equal-weight from the previous Underweight rating. The firm elevated its price target to $915 from $430, pointing to results that exceeded expectations, the record order backlog, and enhanced long-term revenue prospects stemming from power generation demand.
Morgan Stanley currently projects a compound annual growth rate of 12% for CAT spanning 2025 through 2030.
Analyst Consensus Trails Share Price
The consensus price target among analysts stands near $860, remaining beneath current trading levels. This consensus figure has increased by approximately $80 following the earnings announcement.
About half of the analysts who cover CAT maintain Buy recommendations. The standard Buy-rating proportion for companies in the S&P 500 typically falls between 55% and 60%.
During early Friday trading activity, CAT advanced 1.1% to approach $900. The S&P 500 gained 0.5% during the corresponding timeframe.
Morgan Stanley pointed to accelerating capital spending by hyperscale technology companies and expanding adoption of natural gas-powered engines for data center operations as important elements underpinning the enhanced forecast.
CAT’s unprecedented backlog of $63 billion delivers revenue visibility that analysts indicate reinforces conviction in ongoing expansion.
