What is Caterpillar Inc. (CAT) DCF Fair Value and Intrinsic Value in 2026?

Caterpillar Inc. (CAT) intrinsic value is calculated using conservative multi-stage Discounted Cash Flow (DCF) models, 5-year free cash flow trajectories, Graham Numbers, and owner earnings multiples. LocalAlpha tracks real-time margin of safety against live market prices.

What is Caterpillar Inc.'s historical Return on Invested Capital (ROIC) and Moat Rating?

Caterpillar Inc. operates in the Industrials sector (Farm & Heavy Construction Machinery) with an economic moat rating of WIDE. LocalAlpha tracks 5-year audited quarterly ROIC, operating margin stability, and balance sheet solvency ratios.

What is Caterpillar Inc.'s financial health rating and Piotroski F-Score?

Caterpillar Inc.'s balance sheet quality is evaluated using the 9-point Piotroski F-Score, Altman Z-Score solvency model, debt-to-equity ratio, and quick/current liquidity coverage to guard against financial distress.

How does LocalAlpha monitor Caterpillar Inc. (CAT) for quarterly SEC filing thesis breaks?

LocalAlpha audits Caterpillar Inc.'s 10-K, 10-Q, and 8-K regulatory filings on SEC EDGAR within 15 minutes of release. If reported metrics breach an investor's custom ROIC floor, operating margin boundary, or qualitative risk criteria, an autonomous breach audit is dispatched immediately.

StocksCAT

CAT

Caterpillar, Inc.Industrials / Farm & Heavy Construction MachineryINTACT

Caterpillar Inc. provides construction and mining equipment, off-highway diesel and natural gas engines, industrial gas turbines, and diesel-electric locomotives in the United States and internationally. The Construction Industries segment offers asphalt pavers, cold planers, compactors, forestry machines, material handlers, motor graders, pipelayers, road reclaimers, telehandlers, track-type tractors, and track and wheel excavators; backhoe, compact track, skid steer, track-type, and wheel loaders; and related parts and work tools. Its Resource Industries segment provides electric rope and hydraulic shovels, draglines, rotary drills, hard rock vehicles, mining trucks, wheel loaders, off-highway and articulated trucks, wide-body trucks, wheel tractor scrapers and dozers, and landfill and soil compactors; machinery components, and wear and maintenance components; and technology products and services for fleet management, equipment management analytics, autonomous machine capabilities, safety services, and mining performance solutions. The Energy & Transportation segment offers reciprocating engine powered generator sets; reciprocating engines, drivetrain, and integrated systems and solutions; centrifugal gas compressors and related services; and diesel-electric locomotive components, and other rail-related products. Its Financial Products segment provides operating and finance leases, revolving charge accounts, installment sale contracts, repair/rebuild financing, working capital loans, and wholesale financing; and insurance and risk management products and services. The All Other segment offers parts distribution; logistics and distribution services; electronics and control systems; dealer portfolio management; brand management and marketing strategy; and digital investment services. It also provides mining software solutions. The company was formerly known as Caterpillar Tractor Co. Caterpillar Inc. was incorporated in 1925 and is headquartered in Irving, Texas.

Share Price

$818.57

52W: $427.75 - $1073.46

DCF Fair Value

$180.93

-352.4% Premium

Thesis Hub

P/E (TTM)

35.3x

ROIC

16.7%

Operating Margin

22.2%

FCF Yield

1.3%

Debt / Equity

2.33x

Piotroski Score

6/9

Altman Z-Score

3.2

Market Cap

$376.3B

Price vs. Intrinsic Value Corridor

Overvalued vs DCF ($180.93)

Historical market price overlaid against conservative DCF Fair Value & Benjamin Graham Margin of Safety bands.

Period Return (1Y)

—()

Period Range

$— - $—

DCF Fair Value

$180.93

MOS Buy Target (-25%)

$135.70

Valuation Overlays: DCF Fair Value ($180.93) 25% MOS Buy Target ($135.70) Revised Graham ($535.46) Graham Number ($148.34)

2-Stage Discounted Cash Flow (DCF) Workbench

Conservative intrinsic value model based on owner cash generation over a 10-year investment horizon. Opens with LocalAlpha's baseline assumptions (matching the fair value shown above) — adjust any input to stress-test.

Current Market Price

$818.57

DCF Fair Value

$180.44

-353.7% Premium

Starting Free Cash Flow ($M)$5,049M

$100M$5,049M (Reported)$50,000M

Stage 1 Growth (Years 1-5)11.1%

-5%10% (Target)35%

Stage 2 Growth (Years 6-10)4.5%

0%5%20%

Discount Rate (WACC / Hurdle)9.0%

6%9% (Standard)15% (High Risk)

Terminal Perpetual Growth2.5%

1% (GDP Floor)2.5% (Inflation)4.0%

Net Debt ($M)$39,200M

-$100B CashBalance Sheet+$150B Debt

10-Yr PV of Cash Flows

$51.3B

PV of Terminal Value

$70.9B

Implied Enterprise Value

$122.2B

Implied Equity Value

$83.0B

Year	Yr 1	Yr 2	Yr 3	Yr 4	Yr 5	Yr 6	Yr 7	Yr 8	Yr 9	Yr 10
Projected FCF ($M)	$5,609	$6,232	$6,924	$7,692	$8,546	$8,931	$9,333	$9,753	$10,192	$10,650
Present Value (PV)	$5,146	$5,245	$5,346	$5,449	$5,554	$5,325	$5,105	$4,895	$4,692	$4,499

Benjamin Graham & Buffett Value Models

Classical deep value metrics based on asset backing, normalized earnings power, and owner cash yield.

Graham Number-451.8% Premium

$148.34

Calculated as √(22.5 × EPS × BVPS). The maximum theoretical price a defensive investor should pay based purely on asset book value and current earnings.

EPS: $23.18BVPS: $42.19

Revised Graham Formula-52.9% Premium

$535.46

Formula: V = (EPS × (8.5 + 2g) × 4.4) / Y where g is the conservative 7-10 yr growth rate and Y is AAA Bond Yield.

Growth Rate (g%)

Bond Yield (Y%)

Buffett Owner Earnings1.3% Yield

$10.43 / share

True distributable cash flow: Net Income + D&A - Maintenance CapEx. Reflects the cash Buffett would extract without hurting unit volume.

Total: $4.8BYield: 1.3%

Reverse DCF: Market Growth Expectation

SPECULATIVE BARRIER

23.2% CAGR (Next 10 Yrs)

At the current price of $818.57, the market is assuming the business will compound Free Cash Flow at 23.2% per year for the next decade with a 9% hurdle rate.

Value Investor Verdict

⚠ High expectations: Leaves minimal margin of safety for operational hiccups.

Autonomous Thesis Underwriting

Surveil CAT with Mathematical Margin of Safety Rules

Set non-negotiable floor rules for Caterpillar, Inc.. If a newly filed quarterly 10-Q breaks your ROIC floor, operating margin boundary, or balance sheet leverage rules, receive an autonomous breach audit within 15 minutes.

Buffett Quality

ROIC > 15% • Margin > 15% • D/E < 0.5x

Margin Floor Guard

Current Margin 22.2% • Floor > 10%

Solvency Guard

Altman-Z > 2.6 • Current Ratio > 1.5x

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Frequently Asked Questions: Caterpillar, Inc. (CAT) Intrinsic Valuation

Audited fundamentals, DCF intrinsic value sensitivity, and thesis break detection parameters for Caterpillar, Inc..

Based on institutional multi-stage Discounted Cash Flow (DCF) modeling on audited SEC cash flows, Caterpillar, Inc. has an estimated DCF intrinsic fair value of $180.93 per share compared to its current market price of $818.57. This represents an estimated 352.4% premium over fair value. Additionally, its classic Benjamin Graham Number stands at $148.34.