Major Bank Ratings | Bank of America: Caterpillar's 2025 Performance Expected to Be Strong, Target Price Raised to $735

Glonghui, February 2｜Bank of America Securities released a research report stating that Caterpillar's performance in 2025 is expected to be strong, while management has provided relatively conservative guidance for 2026. Investors generally view its 2026 guidance as prudent, mainly due to the potential impact of tariff policies on profit margins. The bank expressed a more positive outlook for Caterpillar this year, considering the 7% revenue growth guidance to be conservative. In addition, the backlog of orders has reached a record high of $51 billion and continues to increase. The bank reiterated its "Buy" rating on the company and raised the target price from $708 to $735 based on improved earnings visibility. The bank noted that the company's next phase of growth will be based on the pace of recovery in the machinery business cycle. Currently, there are positive signs in the machinery industry, including low dealer inventories, strong mining orders, and increased market share in the construction equipment business.