Caterpillar Inc.

AI-generated fair value estimate for this company.

Method: 10-year two-stage unlevered FCF DCF: $9.0B normalized FCF base (current run-rate); 7% annual growth years 1-5 (data-center/power-generation and mining capex upcycle plus record backlog); 4% years 6-10; 8.5% discount rate; 3% terminal growth; $9.0B industrial-segment net debt (gross net debt of $39.2B is mostly matched Cat Financial receivables, excluded here); 459.67M diluted shares.

Reasoning: Caterpillar is a large, cyclical capital-goods leader; a multi-year DCF using a current-cycle FCF base tempered by a fading growth rate (rather than simple extrapolation of the current record-backlog upswing) best captures its through-cycle earnings power, and the captive-finance debt is excluded from net debt since it is backed by matched finance receivables, not industrial leverage.