DA Davidson raised its price target on Caterpillar Inc. to $650.00 from $569.00 but left its rating unchanged at Neutral, according to a note published after the company's fourth-quarter 2025 earnings. At the time of the update, Caterpillar shares were trading at $681.45, a level the research firm noted exceeds the newly established target and is described as sitting just 1% below the stock's reported 52-week high of $679.99.
The firm said the target increase reflects expectations for top-line growth across all three of Caterpillar's reportable segments in 2026, with the datacenter business flagged as the primary driver of that expansion. The company has demonstrated revenue momentum, recording $67.59 billion over the trailing twelve months and year-over-year revenue growth of 4.29%.
DA Davidson tempered its optimism with margin-related caveats. The research note highlighted a lower-end margin range as management continues to absorb costs and adopts a "wait-and-see approach" to tariffs. Those margin pressures are an explicit reason the firm maintained its Neutral stance, suggesting that while growth is anticipated, profitability metrics could remain constrained in the near term.
The firm also commented on Caterpillar's progress against its longer-term objectives, indicating the company appears to be advancing toward its 2030 financial targets. Even so, DA Davidson suggested the current market valuation may not provide an attractive entry point for certain investors. The firm specifically advised value-focused investors to "hold off until a better entry point presents itself," while acknowledging Caterpillar as a "solid operator."
Separate items in the company's results highlighted the strength of its recent quarter. Caterpillar posted record fourth-quarter 2025 earnings, delivering an earnings per share of $5.16 versus the forecast of $4.70. Quarterly revenue also outpaced consensus, at $19.1 billion compared with estimates of $17.85 billion.
Those results prompted several other research firms to rework their targets and views. The adjustments reported include:
- Bernstein raising its price target to $678, citing persistently strong demand despite margin pressures.
- BofA Securities lifting its target to $735, pointing to a substantial backlog and retaining a Buy rating.
- RBC Capital increasing its target to $658 and observing that Caterpillar's 2026 guidance could be conservative.
- Oppenheimer setting a new target of $729, emphasizing strong backlog growth and maintaining an Outperform rating.
Taken together, the analyst reactions reflect a market picking through robust operational performance and near-term margin dynamics. DA Davidson's move to raise its target but preserve a Neutral rating underscores a mixed view: the company shows revenue and earnings strength, yet margin headwinds and current valuation levels counsel caution for some investors.