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Bank of America Sees Caterpillar (CAT) Benefiting From Broadening Equipment Demand Recovery

Caterpillar Inc. (NYSE:CAT) has posted YTD gains of 38.5% as of April 27, putting it among the 10 Large-Cap Stocks that are on Fire Right Now.

On April 24, Bank of America analyst Michael Feniger raised the firm’s price recommendation on Caterpillar Inc. (NYSE:CAT) to $930 from $825. It reiterated a Buy rating on the shares. The firm expects Caterpillar to raise its tariff costs, which could weigh on some of the 2026 upside. At the same time, it lifted its 2027 estimates, pointing to stronger Power & Energy demand. It also said a higher multiple is “warranted” as the recovery in equipment demand starts to broaden.

On April 20, Truist Financial raised its price goal on CAT to $920 from $786 and kept a Buy rating. The update came as part of a broader note previewing Q1 results across Machinery, Infrastructure Services, and Multi-Industry names. After three years of contraction, March US Manufacturing PMI came in at 52.7, following positive readings in January and February. The firm sees a more supportive setup for Q1 results across its Industrials coverage. That backdrop matters, especially with concerns that the Iran war could temper expectations for a stronger industrial recovery. Truist noted that channel destocking has largely run its course. It pointed to “improving” conditions across industrial and cyclical markets, including construction and mining equipment, commercial vehicles, and semiconductors.

Caterpillar Inc. (NYSE:CAT) manufactures construction and mining equipment, off-highway diesel and natural gas engines, industrial gas turbines, and diesel-electric locomotives. The company operates through three segments: Construction Industries, Resource Industries, and Power & Energy.

While we acknowledge the risk and potential of CAT as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than CAT and that has 10,000% upside potential, check out our report about this cheapest AI stock.

READ NEXT: 10 Best Quality Dividend Stocks to Buy According to Reddit and 10 Best Dividend Stocks Yielding at Least 7% According to Hedge Funds

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