Caterpillar (NYSE:CAT) shares gained 1.6% in premarket trading Tuesday after Evercore ISI lifted its rating on the heavy equipment maker to Outperform from In-line, citing improving margin dynamics and signs of reduced discounting.
Analyst David Raso highlighted Caterpillar’s (NYSE:CAT) ability to withstand pricing pressures, writing that its “recent resilience in construction equip margins amid price-cost negativity a reminder of the power of volume leverage and geographic mix.”
Raso added that “now hearing from contacts, Caterpillar (CAT) is making overtures to the channel of likely reduced discounts during 4Q25, inclu
ding (it was learned) CAT just reduced discounts on articulated dump trucks.” He noted that such moves could mean “see EPS upside later in 2025 and, importantly into 2026” as discounting eases.
Evercore set a price target of $476, suggesting about 15% upside from Monday’s close.