Evercore ISI lifts Caterpillar price target to $1,103 on strong 2026 outlook

Evercore ISI analyst David Raso has raised his price target for Caterpillar Inc. (NYSE:CAT) to $1,103 from $878, maintaining an Outperform rating on the shares. The adjustment, made on 11 May 2026, follows the company’s first-quarter earnings call, where management provided a clearer picture of its financial trajectory for the remainder of the year.

During the earnings presentation, Chairman and CEO Creed stated that Caterpillar expects full-year 2026 sales and revenue growth in the low double digits. He emphasised that the company does not anticipate any material impact on its 2026 outlook from ongoing geopolitical uncertainty or higher energy prices, signalling confidence in the firm’s ability to navigate external macroeconomic pressures.

Senior Vice President Kyle Epley provided further detail on cost structures, noting that the company has lowered its full-year 2026 tariff cost estimate to between $2.2 billion and $2.4 billion. This represents a reduction from the previous estimate of $2.6 billion shared in the prior quarter. Epley confirmed that Caterpillar plans to increase efforts to offset tariff-related costs in the second half of the year.

The executive also outlined the company’s expectations for operational restructuring, confirming charges of approximately $300 million to $350 million in 2026. Despite these costs, the firm maintains a capital expenditure forecast of around $3.5 billion. Management projects that MP&E free cash flow will exceed the $9.5 billion reported in the previous year, highlighting strong liquidity generation.

Caterpillar Inc. manufactures construction and mining equipment, off-highway diesel and natural gas engines, industrial gas turbines, and diesel-electric locomotives. The stock has been noted in various market analyses as a high-quality asset, though Evercore’s updated valuation reflects a more bullish stance on the industrial giant’s near-term prospects.