-- CFRA, an independent research provider, has providedwith the following research alert. Analysts at CFRA have summarized their opinion as follows:
Ahead of CAT's Q1 print, we maintain our 12-month target at $700 but downgrade our rating on shares to Sell from Hold due to valuation and margin risk. Our target values shares at 25.4x our 2027 EPS view of $27.57 (revised from $27.46; 2026 EPS estimate updated to $22.61 from $23.43), a premium to CAT's historical forward multiple that we believe is warranted given unprecedented demand for power generators. While robust generator demand and safety stockpiling activity of construction/mining equipment is encouraging, we expect tariff impacts to be potentially a greater threat to profitability in 2026 given amended Section 232 tariffs that now apply duties to the full customs value of the products instead of only to the value of the metal inputs (went into effect April 6, 2026). Given CAT's complex and highly stretched global supply chain network, the company is vulnerable to sweeping protectionist trade actions. We see downside risk in shares, as a 160%+ return over the past year carries higher expectations.