CAT Stock Trades at Premium Value: Should You Buy, Hold or Sell?

Caterpillar Inc. (CAT) is currently trading at a premium value with a forward P/E ratio of 26.32X, compared to the industry average of 24.59X. The company's valuation is concerning due to ongoing earnings pressure tied to tariffs. Despite reporting its highest quarterly revenue ever in Q3, earnings still declined, and the cost of sales surged 16%. CAT now expects 2025 revenues to be "modestly" higher compared to 2024, with net incremental tariffs projected at $1.6-$1.75 billion. The company maintains its revenue projection at $42-$72 billion and margins are anticipated between 10% and 22%.