Author argues Caterpillar's stock has quadrupled while earnings have stagnated, making the valuation unjustifiable at current multiples.
CAT — SHORT Author argues CAT's stock has nearly quadrupled from $295 to $990 while annual EPS has gone nowhere in three years, currently around $20-22. At 38-40x forward earnings, the stock would need to earn ~$50 per share to justify $990 at a normal 20x industrial multiple, which requires capacity that doesn't come online until 2028-2029. The entire move is pricing in 2029-2030 earnings that don't yet exist, and capex will compress free cash flow in the interim. Main risk is the AI power infrastructure narrative continuing to drive multiple expansion.
The earnings have gone literally nowhere in three years while the stock has nearly quadrupled.
This Reddit post, published June 25, 2026, features u/ProfileBest2034 discussing CAT. 1 trade idea extracted by AI with direction and confidence scoring.
Speakers: u/ProfileBest2034 · Tickers: CAT