Caterpillar's Strong Earnings Power Remains Intact, BofA Securities Says

10:45 AM EDT, 10/30/2026 (MT Newswires) -- Caterpillar's (CAT) strong earnings power remains intact, with potential to grow earnings per share amid the company's conservative guidance and macro uncertainty, BofA Securities said in a Friday note. The company reported Q3 adjusted profit of $7.20 per share, up from $4.95 a year earlier, as sales and revenue rose to $20.68 billion from $17.64 billion. Caterpillar shares fell after the results and BofA attributed this to a narrow earnings beat. BofA also noted that Caterpillar did not raise its outlook, even with a record $78 billion backlog, limiting EPS revisions. Caterpillar's backlog and EPS outlook entail minimal capital requirements, yet the company trades at a free cash flow yield of 5%, the brokerage said. The company still has the potential to generate 15% of its market cap in free cash flow in the coming years, BofA added. BofA has a buy rating on Caterpillar, with a lower price target of $746 from $850 previously. Price: 633.70, Change: -13.69, Percent Change: -2.11