Al Root

Caterpillar stock rose early Tuesday after catching another upgrade -- the second this month from the same analyst. Things are getting better for the maker of heavy-duty equipment.

Shares were up 0.3% at $349.39, while futures on the S&P 500 and Dow Jones Industrial Average were down 0.3%.

Baird analyst Mig Dobre raised his rating to Buy from Hold, lifting his target for the stock price to $395 from $309. He upgraded the shares from Sell to Hold on May 1, following the company's first-quarter earnings report.

"A combination of lower-than-normal seasonal dealer inventory build, much better-than-expected orders/backlog, and stabilization in dealer retail sales all pointed to potential fundamental improvement into 2026," wrote Dobre on Tuesday. Reduced tensions over trade between the U.S. and China are another positive, he said.

Caterpillar stock rose 5.2% on Monday after the U.S. and China agreed to dramatic tariff cuts for 90 days.

Coming into Tuesday trading, Cat stock was down about 6% so far in 2025 and down about 1% over the past 12 months. Weakening business conditions have weighed on investor sentiment. Cat is expected to earn about $18.75 a share in 2025, down from almost $22 in 2024.

Investors, however, like to buy Cat stock when earnings are at their cyclical lows, before things improve, and Dobre sees improvement next year. He sees Cat earning north of $21 a share in 2026.

Overall, 48% of analysts covering the stock rate the shares at Buy, according to FactSet. The average Buy-rating ratio for stocks in the S&P 500 is about 55%. The average analyst price target for Caterpillar shares is about $358.

Write to Al Root at allen.root@dowjones.com

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May 13, 2025 07:41 ET (11:41 GMT)

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