Caterpillar Inc. (NYSE:CAT)

The share price exhibited considerable fluctuations over the analyzed period. Initially, from 2006 to 2009, the price experienced a notable decline, reaching its lowest in 2009. Subsequently, the price generally trended upward with intermittent periods of decline, particularly between 2014 and 2016, before initiating a more sustained increase from 2016 onwards. The most prominent growth in share price occurred from 2021 through 2025, where it rose sharply, more than tripling over this timeframe.

Operating profit per share showed variability as well, with some noteworthy extremes. From 2006 until 2009, operating profit per share remained relatively stable with a minor decrease in 2010. A significant drop occurred in 2010 followed by a pronounced recovery and overall upward trend from 2011 onwards. In the last few years analyzed, from 2019 through 2025, operating profit per share exhibited strong growth, reaching record highs. The spike in operating profit per share in 2024 and 2025 underscores improved operational performance.

The ratio of price to operating profit (P/OP) largely fluctuated in inverse relation to the operating profit per share, reflecting valuation adjustments by the market. Initially, the ratio showed a declining trend from 2006 to 2009, reaching the lowest point in 2009, indicating possibly undervaluation during a period of depressed share price. However, in 2010, this ratio increased dramatically due to the sudden downturn in operating profit per share. Subsequent years displayed volatile yet generally declining P/OP ratios until 2016, with an exceptional spike in 2016 suggesting market overvaluation relative to earnings at that time. From 2017 onward, the ratio gradually decreased, indicating that the rise in share price started to align more closely with operational profitability gains. The P/OP ratio’s moderation in the later years suggests the stock’s valuation became more reflective of its improving earnings performance.

Share Price Trend

After an initial decline to 2009, followed by intermittent fluctuations, the share price rose substantially post-2016, culminating in a strong upward trajectory from 2021 to 2025.

Operating Profit Per Share

Operating profit per share oscillated during early years with a sharp decline in 2010 but showed a consistent improvement from 2011 onward, notably peaking in 2024 and 2025.

Price to Operating Profit Ratio (P/OP)

The P/OP ratio demonstrated volatility, with a low point in 2009, an extreme spike in 2010 due to earnings collapse, and an excessive value in 2016. The ratio gradually declined after 2017, aligning more closely with the improved operating profits.