Why we don't show a single “fair value” for CAT
Even the optimistic scenario of a conservative trailing-FCF model ($388.16) 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?
$888.73 is justified only if free cash flow grows about +40.9% 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 | 11.1%/yr | 12.5% | $215.63 |
| Base case | 14.1%/yr | 11.5% | $288.99 |
| Optimistic | 17.1%/yr | 10.5% | $388.16 |
| Third-party model estimate (FMP) | independent reference · retrieved Jul 26, 2026 · assumptions not provided | $194.08 | |
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
$888.73
Market-Implied Growth
+40.9%/yr
vs +17.8% 5Y actual
Base-Case Model Value
$288.99
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 $9.3B · 0.46B shares · net debt $33.4B
Estimated Fair Value
$288.99
-67.5% vs $888.73
How the estimated fair value shifts with the discount rate (WACC) and terminal growth, holding your 14.1%/yr FCF growth and 10-year horizon fixed. Green = above today's $888.73; red = below. Your current case is outlined.
| WACC ↓ / Terminal → | 1.50% | 2.00% | 2.50% | 3.00% | 3.50% |
|---|---|---|---|---|---|
| 9.5% | $351 | $374 | $401 | $431 | $466 |
| 10.5% | $301 | $318 | $338 | $360 | $385 |
| 11.5% | $260 | $274 | $289 | $306 | $325 |
| 12.5% | $228 | $238 | $250 | $263 | $278 |
| 13.5% | $200 | $209 | $218 | $229 | $240 |
