Caterpillar, one of the biggest manufacturers of construction equipment, will be the beneficiary of the ongoing recovery of the U.S. housing market. As a result, Caterpillar's stock price has risen 56% in less than 4 months, creating a significant divergence from its current financial results. Its Construction Industries segment's U.S. sales were $2.9 billion in Q1 2025, down 24.2% year over year. Meanwhile, Wall Street analysts expect its total revenue and EPS to decline year-on-year in the second quarter of 2025. In this article, you will know why, according to my 'ALLKA 4D Rating' model, I believe that Caterpillar's risk/reward profile has turned unfavorable. Now it's my turn to present an analysis of Caterpillar (NYSE:), which has played a key role in the construction industry not only in the US but also in remote parts of the world.

Time To Take Profits On Caterpillar Stock (NYSE:CAT)

Caterpillar's stock price rose 56% in 4 months due to U.S. housing market recovery, but its Q1 2025 U.S. sales fell 24.2% year-over-year. Wall Street analysts predict revenue and EPS declines in Q2 2025, prompting concerns about the company's risk/reward profile.