Caterpillar‘s CAPE ratio

The CAPE ratio for Caterpillar compares its current stock price to the average inflation-adjusted earnings over the past 10 years. As a leading manufacturer of construction and mining equipment, Caterpillar’s CAPE ratio can reflect the cyclical nature of the industry, influenced by economic growth, infrastructure development, and commodity prices. A high CAPE ratio may suggest overvaluation, signaling lower future returns, while a low ratio could indicate undervaluation and potential for growth. Investors use the CAPE ratio to assess Caterpillar’s long-term valuation in a fluctuating market.