Why we don't show a single “fair value” for CAT
Even the optimistic scenario of a conservative trailing-FCF model ($271.12) sits far below today's price — the market is paying for growth and durability beyond what this model structure captures. The honest lens is the question below: what growth does today's price actually require? The model scenarios are listed further down for reference.
What would today's price require?
$822.48 is justified only if free cash flow grows about +42.7% a year (fading to 2.5% long-run) at a 11.5% required return — faster than the company has actually grown.
| Scenario | FCF growth (fading to 2.5%) | Discount | Value / share |
|---|---|---|---|
| Conservative | 7.0%/yr | 12.5% | $142.99 |
| Base case | 10.0%/yr | 11.5% | $197.47 |
| Optimistic | 13.0%/yr | 10.5% | $271.12 |
| Third-party model estimate (FMP) | independent reference · retrieved Sep 8, 2026 · assumptions not provided | $176.32 | |
The FMP figure is a third-party point estimate. Its cash-flow forecast, discount rate, terminal growth, and valuation date are not included in the stored response, so TGMCharts presents it only as a reference—not as an intrinsic-value conclusion or price target.
Current Price
$822.48
Market-Implied Growth
+42.7%/yr
vs +9.8% 5Y actual
Base-Case Model Value
$197.47
model output — not a price target
Edit the assumptions to see how they change the estimated fair value. Opens seeded with TGM's data-driven base case for CAT (growth from its own 5-year record, discount from its beta), so the sandbox starts where the scenarios above leave off. Illustrative model — not investment advice.
Base inputs: FCF $8.1B · 0.46B shares · net debt $33.4B
Estimated Fair Value
$197.47
-76.0% vs $822.48
How the estimated fair value shifts with the discount rate (WACC) and terminal growth, holding your 10.0%/yr FCF growth and 10-year horizon fixed. Green = above today's $822.48; red = below. Your current case is outlined.
| WACC ↓ / Terminal → | 1.50% | 2.00% | 2.50% | 3.00% | 3.50% |
|---|---|---|---|---|---|
| 9.5% | $243 | $260 | $279 | $301 | $326 |
| 10.5% | $206 | $219 | $233 | $249 | $267 |
| 11.5% | $177 | $187 | $197 | $210 | $223 |
| 12.5% | $153 | $160 | $169 | $179 | $189 |
| 13.5% | $133 | $139 | $146 | $154 | $162 |
