Caterpillar (CAT) Stock Soars 46% in 2025 — BofA Sees More Gains Ahead

Key Takeaways

• Caterpillar shares have climbed more than 46% this year, ending Thursday’s session at $835.24
• Bank of America’s Michael Feniger lifted his CAT price objective 13%, moving from $825 to $930 with a Buy recommendation
• The updated $930 forecast suggests approximately 11% additional upside and exceeds CAT’s 52-week peak of $845.27
• Bank of America anticipates a rebound in Caterpillar’s energy and oil & gas business starting in 2027
• Wells Fargo maintains the Street’s most optimistic projection at $960, while consensus estimates average $769.94

Caterpillar has emerged as one of 2025’s top-performing stocks, climbing more than 46% since January. Bank of America now argues that the heavy equipment manufacturer still has significant upside potential.

Caterpillar Inc., CAT

Michael Feniger, an analyst at Bank of America, boosted his price objective for CAT shares by 13% to $930 on Friday, raising it from his previous $825 forecast while reaffirming his Buy recommendation. The revised target exceeds Caterpillar’s 52-week high of $845.27 and indicates roughly 11% upside potential from Thursday’s closing price of $835.24.

The upgrade arrives as market watchers have concentrated heavily on Caterpillar’s power generation operations. Strong appetite for diesel and natural gas generator sets, engines, and turbines that supply electricity to data centers has driven considerable investor enthusiasm.

Caterpillar’s Power & Energy division accounts for approximately 40% of overall revenue, and momentum in this segment continues to build according to Bank of America’s proprietary Construction Dealer survey results.

However, Feniger’s recent analysis redirects some attention toward a business line that hasn’t generated as much buzz recently — the oil and gas segment.

Oil & Gas Portfolio Poised for 2027 Turnaround

While power generation has dominated headlines, Feniger now highlights Caterpillar’s energy operations as a meaningful catalyst for growth heading into 2027.

He anticipates Caterpillar’s oil and gas equipment portfolio will stage a recovery next year, supporting what he describes as a “broadening out” of machinery demand beyond the power generation category.

The outlook isn’t without near-term headwinds. Feniger warned of potential sales pressure in Middle Eastern markets over the coming months and acknowledged downside risks to mining and excavation equipment revenues.

He also pointed out that elevated crude oil prices could indirectly dampen construction activity in 2027 by driving interest rates higher — though he emphasized that Caterpillar’s diversified product lineup provides a natural “inherent hedge” that mitigates risks across varying economic conditions.

CFO Transition on the Calendar

On the executive front, Caterpillar is preparing for a leadership change. Kyle Epley will assume the Chief Financial Officer role on May 1, 2026, replacing Andrew Bonfield, who is retiring after an extended period managing the company’s finances.

During Bonfield’s leadership, Caterpillar delivered 2025 sales and revenue totaling $67.6 billion, including a record-breaking $19.1 billion in fourth-quarter performance alone.

Other Wall Street firms have also weighed in recently on CAT shares. Wells Fargo maintains the Street’s highest price target at $960, pointing to earnings momentum from new Solar Turbines contracts. Jefferies reaffirmed its Buy rating with a $900 target, emphasizing growth opportunities tied to U.S. natural gas pipeline infrastructure buildout. Bernstein increased its target to $769, noting potential gains from inventory replenishment cycles.

Across Wall Street, the current analyst consensus includes 11 Buy ratings, five Hold ratings, and one Sell rating issued over the past three months. The average price target stands at $769.94 — approximately 8% beneath the stock’s current trading level.

Bank of America’s $930 price objective now ranks among the Street’s most optimistic projections, and Feniger’s emphasis on the 2027 oil and gas recovery provides the bullish investment thesis with a secondary growth driver beyond data center power infrastructure demand.

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