JPMorgan Reaffirms Bullish Outlook on Caterpillar (CAT) Stock

On June 3, JPMorgan analysts reiterated an Overweight rating and a $395 price target on Caterpillar Inc. (NYSE:CAT) stock. The analyst’s bullish stance follows the strong performance of the company’s CAT Financial Services. The segment contributed to the company’s profits in the first quarter of 2025.

A construction team in a mining datacenter building work site with plans and equipment in hand.

Revenue in the financial services segment was up by 1% in Q1 2025 to $860 million. Consequently, it accounted for 6% of Caterpillar’s total revenue. In addition, it accounted for 7% of adjusted profit before tax, driven by favorable impacts from higher average earnings assets.

Nevertheless, CAT Financial Services’ profit was down by 24% year-over-year in the quarter, reaching $130 million. The absence of a $33 million insurance settlement from the previous year was one of the reasons behind the decline. Provision for credit losses in the segment was also up by $22 million in the quarter to $29 million.

The company’s outlook has also improved on infrastructure funding, which is increasing amid steady growth in the global mining sector. Caterpillar and other companies have secured a $980 million contract for the FEMA generator program.

Caterpillar is a global manufacturer of construction and mining equipment, diesel and natural gas engines, industrial turbines, and diesel-electric locomotives. It also provides financial services through Caterpillar Financial Services.

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