Irving, Texas-based Caterpillar Inc. (CAT) is a manufacturer of construction and mining equipment, off-highway diesel and natural gas engines, industrial gas turbines, and diesel-electric locomotives. With a market cap of $166.1 billion, the company operates through Construction Industries, Resource Industries, Energy & Transportation, Financial Products, and Other segments.

Shares of CAT have significantly underperformed the broader market over the past 52 weeks. CAT stock has dropped 2.4% over this time frame, while the broader S&P 500 Index ($SPX) has gained 12.3%. Moreover, shares of CAT are down 3.6% on a YTD basis, compared to SPX’s marginal return.

Looking closer, Caterpillar has also lagged behind the Industrial Select Sector SPDR Fund’s (XLI) 12.4% surge over the past year and 6.7% gains in 2025.

Despite reporting weaker-than-expected earnings, Caterpillar stock rose marginally following the release of its Q1 2025 results on Apr. 30. Revenue declined 9.8% year-over-year to $14.2 billion, primarily due to lower sales volume driven by changes in dealer inventories. Adjusted EPS came in at $4.25, down 24.1% from the prior-year quarter, and fell short of the analyst’s estimate of $4.30.

For the current fiscal year 2025, ending in December, analysts expect CAT's adjusted EPS to decline nearly 13.4% year-over-year to $18.97. The company has a mixed earnings surprise history. It beat the Street's bottom-line estimates twice over the past four quarters, while missing on two other occasions.

Among the 21 analysts covering the stock, the consensus rating is a “Moderate Buy.” That’s based on nine “Strong Buy” ratings and one “Moderate Buy”, 10 “Holds,” and one “Strong Sell.”

This configuration is slightly more bullish than three months ago, with eight “Strong Buy” ratings and one “Moderate Sell” rating on the stock

On May 13, Baird analyst Mircea Dobre raised CAT’s price target to $395 and upgraded the stock to an “Outperform” rating.

As of writing, Caterpillar is trading slightly below the mean price target of $353.37. Meanwhile, the Street-high target of $425 suggests a notable 21.5% upside potential.