Caterpillar reported its June 10 earnings and closed the day at $914.70, up half a percent on the week — the pre-print calm that defined the past two weeks of coverage has now resolved into a post-earnings reality check.
The numbers bear out the bull case that analysts had been pricing in. The April 30 beat — which moved the stock nearly 10% on the day and another 10% over the following five sessions — set a high bar. The Street responded by lifting targets en masse: JPMorgan raised to $1,125, Citigroup to $1,020, Wells Fargo to $1,050, and Argus to $990. The consensus mean now stands at $937 against a current price of $914.70. Morgan Stanley upgraded the stock outright, moving from Underweight to Equal-Weight in May and nearly doubling its target from $430 to $915. The Street is no longer fighting the rally — it is recalibrating around it. The residual debate is whether tariff headwinds — which compressed construction margins by 470 basis points and resource margins by 510 basis points in Q1, partly from an $800 million incremental tariff cost — will moderate or worsen as macro conditions evolve.
Options positioning tells a quiet story for a stock fresh off a major print. The put/call ratio reads 1.08, back above its Monday low of 0.97 but still running below the 20-day mean of 1.13. The z-score sits at -0.32 — essentially neutral. Compare that to early May, when the PCR was pinned between 1.38 and 1.47 near the 52-week high of 1.47. That protective hedging wave unwound completely into earnings, and it has not rebuilt. The borrow market reinforces the same indifference: short interest slipped to 1.73% of the free float on Tuesday after touching 1.84% earlier in the week, and availability is essentially unconstrained at over 8,500% of short interest. Cost to borrow remains negligible at 0.41%. There is no bearish conviction in the lending market — and no sign one is building.
The fundamental picture divides clearly. Bulls point to a $51.2 billion backlog — up 71% year-over-year — and accelerating demand in the Power and Energy segment, which grew 22.9% as data center buildout and oil and gas activity drove electric power applications. The factor score board is supportive: forward EPS momentum ranks in the 94th percentile of the universe, the EPS surprise rank sits at the 75th percentile, and the dividend score is near-perfect at 99. Bears anchor on valuation and margins. The PE is running near 34x on trailing earnings, price-to-book above 16.5x, and the EV/EBIT factor ranks in just the 18th percentile — the weakest pillar in an otherwise strong scorecard. The ORTEX short score is a benign 32.5, roughly flat all week, confirming no meaningful short-side pressure. Peers diverged on the day: CMI slipped 0.5% while NPO and WAB added 2% and 2.4% respectively, suggesting today's slight CAT underperformance relative to the industrial complex was idiosyncratic rather than sector-wide.
Insider activity adds a modest counterpoint. Group President Denise Johnson sold roughly 15,000 shares across nine transactions on May 14 at prices between $905 and $912 — totalling around $14.6 million. The Chief Accounting Officer also sold 360 shares on May 13. These are modest relative to the float and come with low trade significance scores, but the 90-day net insider position across all insiders is actually net positive at around 123,000 shares — likely reflecting option exercises elsewhere in the period.
The next scheduled earnings date is August 5. Between now and then, the key variables are how construction margin recovers as tariff costs are absorbed or passed through, and whether Power and Energy order flow accelerates further on data center demand. The backlog number will be the single most-watched line when August arrives.
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