Jefferies Reiterates Buy Rating#
Jefferies has reaffirmed its Buy rating for Caterpillar Inc. (NYSE:CAT) and set a price target of $900. This decision is based on the anticipated growth in U.S. natural gas pipeline capacity, which is expected to boost demand for Caterpillar's products.
Natural Gas Pipeline Expansion#
The expansion of natural gas pipelines is projected to generate significant demand for gas compression equipment. Jefferies estimates that this could lead to an increase in revenue for Caterpillar ranging from $0.7 billion to $1.5 billion, which is not yet fully accounted for in current market estimates. Recent data shows that six analysts have raised their earnings forecasts for Caterpillar, reinforcing a positive outlook for the company.
Power & Energy Segment Growth#
Jefferies has also updated its projections for Caterpillar's Power & Energy segment through 2028, maintaining the company as its top machinery pick for 2026. The firm believes there is substantial value in Caterpillar's shares, particularly due to underappreciated growth cycles, especially related to natural gas.
Recent Developments#
In its latest financial report, Caterpillar announced projected sales and revenues of $67.6 billion for 2025, with a record revenue of $19.1 billion in the fourth quarter. Additionally, the company is undergoing a leadership change, with Kyle Epley set to become Chief Financial Officer on May 1, 2026. The Board of Directors has also decided to maintain the quarterly dividend at $1.51 per share, payable on May 19, 2026. Recent surveys indicate modest growth in construction equipment sales, slightly exceeding expectations for early 2026.