As Caterpillar Inc. prepares to release its quarterly figures, the industrial giant is positioned on a foundation of unprecedented order strength. A record backlog provides significant visibility for its operations, though the market now watches to see if this will translate into sustained earnings momentum through 2026.
Unprecedented Backlog Offers Multi-Year Visibility
Caterpillar enters this earnings season with a record order backlog valued at $39.9 billion. This substantial pipeline is expected to cover a major portion of production for the next two fiscal years, substantially insulating the company from near-term economic fluctuations. Key demand drivers include domestic energy initiatives, a global mining cycle focused on copper and lithium, and burgeoning needs for equipment related to data center expansion and broader infrastructure upgrades.
The Construction Industries segment recently demonstrated continued pricing power, reporting revenue growth of approximately 7% toward the end of 2025. Both company management and market observers view this as a critical buffer against broader macroeconomic volatility.
- Order Backlog: $39.9 billion (record high)
- 2025 Performance: +59.5% (top performer within the Dow Jones Industrial Average)
- Quarterly Dividend: $1.51 per share (payable February 19, 2026)
- Earnings Release: Thursday, January 29, 2026
Shares currently trade at €527.00, remaining approximately 5.6% below their 52-week peak and maintaining a near-term upward trajectory.
Should investors sell immediately? Or is it worth buying Caterpillar?
Market Expectations and Valuation Perspective
For the fourth quarter, market experts anticipate earnings per share (EPS) of $4.52 on revenue of $17.81 billion. This follows an unexpectedly strong Q3, which saw an EPS of $4.95. Reflecting this optimism, several major institutions have recently raised their price targets. Citigroup set a target of $710, while J.P. Morgan’s stands at $740. Among 23 analysts tracked, 13 currently recommend a “Strong Buy” rating.
The current valuation, with a price-to-earnings ratio of about 33.1, incorporates this positive outlook. Investors are increasingly viewing Caterpillar as a hybrid entity: a traditional machinery and commodities business that also serves as a growth partner for technology infrastructure. This perception is bolstered by ongoing share repurchases and a dividend history marked by 32 consecutive annual increases.
The upcoming report on January 29th will provide concrete direction for the share price. Should the results confirm the strength of the order book and margin progression, the recently elevated price targets and existing momentum will likely receive further validation. Conversely, should revenue or earnings significantly disappoint, the stock’s premium valuation could face near-term pressure, increasing its vulnerability.
Ad
Caterpillar Stock: Buy or Sell?! New Caterpillar Analysis from January 26 delivers the answer:
The latest Caterpillar figures speak for themselves: Urgent action needed for Caterpillar investors. Is it worth buying or should you sell? Find out what to do now in the current free analysis from January 26.
Caterpillar: Buy or sell? Read more here...
