Jefferies on Tuesday increased its price target for Caterpillar Inc. to $750.00 from $700.00 and left its recommendation at Buy. The firm’s revised target remains under the analyst high target of $790 but implies material upside from the last quoted share price of $635.92.
According to InvestingPro data cited in the note, Caterpillar appears overvalued on a Fair Value assessment. Jefferies, however, framed its move as driven by expectations for the company’s 2026 performance rather than a short-term re-rating.
The brokerage pointed to a balanced setup for fourth-quarter results, highlighting steady shipment volumes and tariff effects the market already understands as factors likely to shape near-term performance. Caterpillar is scheduled to report quarterly results in two days, on January 29, a near-term catalyst that will show whether the company can sustain the 63.22% share-price return it has delivered over the past year.
Jefferies signaled particular conviction in the Construction Industries segment for 2026. The firm listed several drivers for that segment’s improvement - rising construction demand, healthier dealer order books, firmer commodity pricing and strengthening replacement cycles - that together underpin its constructive view.
On the Resources Industries side, Jefferies noted there is additional upside potential if mining activity picks up later in the year. The $750 target reflects Jefferies’ valuation of Caterpillar at 25 times its estimated 2026 EBITDA, a multiple the firm says is consistent with expectations for sustained volume and margin expansion across the company’s principal businesses.
Recent company developments
- Caterpillar announced a leadership transition in its Construction Industries group: Tony Fassino, the current group president, will retire in May 2026; Rod Shurman is scheduled to take over in February 2026.
- The company is broadening a collaboration with NVIDIA to incorporate more AI technology into its equipment, targeting improved autonomous operations and more intelligent in-cab experiences.
- At CES, Caterpillar introduced the Cat AI Assistant, a conversational AI aimed at delivering context-rich information for jobsite operations.
On the analyst front, Bernstein reiterated a Market Perform rating for Caterpillar with an unchanged price target of $630.
Operationally, Raymond James reported extended lead times for Caterpillar engine models, notably a substantial increase in waits for the 3600 family of engines. Those lead times have lengthened by roughly 20 weeks since mid-September, a change Raymond James attributed to stronger demand, especially from the data center sector.
The juxtaposition of a higher Jefferies target and the InvestingPro Fair Value assessment underscores differing views on near-term valuation versus medium-term operational improvement. Investors will have a nearer-term data point in the January 29 earnings release to reconcile those perspectives.