Al Root

Caterpillar's first-quarter results blew investors away, leaving them breathless after an incredible rally. Shares aren't done yet, according to Baird analyst Mig Dobre.

Cat reported first-quarter earnings per share of $5.54 from sales of $17.4 billion on Thursday. Wall Street was looking for earnings per share of $4.65 from sales of $16.5 billion. Along with the earnings beat, guidance was raised. Cat expects to grow annual sales 6% to 9% through 2030, up from prior guidance of 5% to 7%. For 2026, sales growth should be in the low double digits, up from prior guidance of closer to 7%.

"The increased outlook is driven by resilient end markets and solid execution by our team," said CEO Joe Creed on his company's earnings conference call. "Power generation [sales] grew 48%, driven by strong demand for large gensets and turbines used in data center applications."

Cat stock jumped almost 10% Thursday to just over $890 a share, a new 52-week and all-time high.

Shares can hit $1,165, up another 30%, says Dobre. That's a new Street-high price target, up from his prior target of $940. He rates Cat stock Buy and put a bullish "Fresh Pick" on shares after earnings. A Baird Fresh Pick means the broker expects stocks to go up or down soon.

In the case of Cat, Dobre sees the power generation opportunity in "its early innings, with recently announced large orders set to be delivered over the next five years," adding in a Thursday report, "Importantly, Power isn't the only driver here, 1Q [was] the highest order intake quarter for Resource Industries since 2012."

Overall, the average analyst price target for Cat stock is about $860, roughly $30 below where shares are trading. Wall Street, however, has had trouble keeping up. Coming into Friday trading, Cat stock was up 55% year to date and up 184% over the past 12 months.

The average price target is up $80 since earnings.

Half of the analysts covering shares rate them Buy. The average Buy-rating ratio for stocks in the S&P 500 typically ranges from 55% and 60%.

Cat also caught a post-earnings upgrade from Morgan Stanley. They raised their rating to Hold from Sell.

Shares of the heavy machinery maker were up 0.5% at $894.66 in premarket trading, while S&P 500 and Dow Jones Industrial Average futures were up 0.1% and 0.2%, respectively.

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

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May 01, 2026 08:40 ET (12:40 GMT)

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