Caterpillar (CAT) Stock May Be 20% Undervalued Following Backlog Questions

What happened: A Simply Wall St analysis examines whether Caterpillar ($CAT) is undervalued on a discounted cash flow basis after a 15% share price pullback and questions about its backlog. Key numbers: Share price US$713.31. Reported backlog US$72b. Tariff costs US$2.2b. 5 year share gain about 274%. 30.2x P/E. Twelve month free cash flow about $9.4b. Why it matters: The DCF output suggests the market discounts Caterpillar's cash flow profile despite order visibility, while community views split between a tariff pressured opportunity and a stock that already bakes in optimism. Market: +0.2% today ($716.68), +20.3% YTD, 0.7x vol — as of 19:34 UTC Verified: Q3_2026 (Oct 29) revenue $19.6B vs $19.6B est; next print ~Jan 28

A Simply Wall St analysis examines whether Caterpillar ($CAT) is undervalued on a discounted cash flow basis after a 15% share price pullback and questions about its backlog.

The DCF output suggests the market discounts Caterpillar's cash flow profile despite order visibility, while community views split between a tariff pressured opportunity and a stock that already bakes in optimism. Market: +0.2% today ($716.68), +20.3% YTD, 0.7x vol — as of 19:34 UTC Verified: Q3_2026 (Oct 29) revenue $19.6B vs $19.6B est; next print ~Jan 28