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Caterpillar vs. Komatsu: Which Heavy Equipment Stock is the Better Buy?
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Key Takeaways
CAT posted 22% Q1 2026 revenue growth and expects low double-digit revenue growth for 2026.
Caterpillar raised its long-term revenue CAGR target to 6-9% through 2030 from 5-7%.
Komatsu expects lower fiscal 2026 sales, profit and net income amid tariff and volume pressures.
Caterpillar Inc. (CAT - Free Report) and Komatsu Ltd. (KMTUY - Free Report) are among the world’s leading manufacturers of construction and mining equipment, with Caterpillar holding the top position and Komatsu close behind. Both companies are globally recognized for their signature yellow machinery and serve diverse end markets such as infrastructure, construction, mining, oil and gas and industrial applications.
Illinois-based Caterpillar has a market capitalization of $430 billion, whereas Tokyo, Japan-based Komatsu has a market capitalization of $38 billion. Around 80% of KMTUY’s revenues are generated outside of Japan, underscoring its strong international presence.
Both are closely watched by investors to gauge the health of the broader manufacturing and infrastructure landscape, especially during periods of economic uncertainty. The question is which stock you should put your money on. To find out, let us dive into the fundamentals, growth prospects and challenges of both Caterpillar and Komatsu.
The Case for Caterpillar
Caterpillar has delivered positive revenue growth over the past three quarters and earnings growth in the past two. In the first quarter of 2026, the company generated roughly $17.4 billion in revenues, up 22% year over year, driven by higher sales volumes across its businesses. Adjusted earnings per share climbed 30.4% to $5.54, accelerating sharply from the modest 0.4% increase reported in fourth-quarter 2025. The performance was particularly notable given the estimated $600 million tariff impact during the quarter.
For 2026, Caterpillar expects revenue growth in the low double-digits compared with 2025. Adjusted operating margin is, however, projected toward the lower end of its range, due to continued tariff pressures, which are expected to create a full-year headwind of approximately $2.2-$2.4 billion.
At an annual revenue base of roughly $60 billion, Caterpillar expects adjusted operating margins between 15% and 19%. If revenues reach $72 billion, margins could improve to 18-22%, while a stronger scenario with $100 billion in revenues could support margins of 21-25%.
The company has also raised its long-term revenue CAGR target to 6-9% through 2030, compared with its earlier 5-7% outlook shared at Investor Day. Operational targets include growing Construction Industries’ sales to users by 1.25x from 2024 levels by 2030, tripling autonomous trucks in Resource Industries, and increasing Power Generation sales from 1.3x to more than 3x.
Connected assets are expected to rise from more than 1.6 million to 2 million, while e-commerce sales per business day are projected to jump from 4% to more than 50% by 2030. Services revenues are targeted to rise from $24 billion in 2025 to $30 billion by 2030.
Caterpillar’s growth is expected to be driven by U.S. infrastructure spending, mining demand linked to energy transition, automation adoption and rising data center and sustainability-related investments.
The Case for Komatsu
KMTUY’s revenues in the fourth quarter of fiscal 2025 (ended March 31, 2026) came in at around JPY 1.217 billion ($7.76 billion), marking a 6% rise on a year-over-year basis. Komatsu’s Construction, Mining & Utility Equipment sales increased 6.5% in the quarter, while Industrial Machinery & Others sales decreased 1.2%. The company reported earnings per share of 75 cents, which were down 18% year over year. Although Komatsu has been delivering sales growth in the last two quarters, earnings continue to remain under pressure.
For fiscal 2025, Construction, Mining & Utility Equipment sales inched up 0.2%, but the metric was mainly led by higher prices, which helped offset the impact of low volumes. Segment profit declined due to higher costs reflecting tariffs.
Komatsu anticipates Construction, Mining & Utility Equipment sales to dip 0.4% in fiscal 2026 as well, reflecting lower sales volumes citing the situation in the Middle East. Growth in North America will be offset by lower sales in the Middle East and Asia. Segment profit will decrease 10.4%. Industrial Machinery and Others sales will inch up 0.1% while segment profit will be down 2.5%. Net income attributable to Komatsu will be down 15.5%.
Around 50% of products sold in the United States are imported (mainly from Japan and China), making it vulnerable to the U.S tariffs. Komatsu expects to suffer annual negative impacts of 37.8 billion yen ($0.24 billion) from increased costs linked to U.S. tariffs.
Over the past decade, Komatsu has invested more than $5 billion in the North American manufacturing industry by adding companies to the Komatsu group. The company has invested more than $650 million in North American infrastructure to upgrade facilities and strengthen operational capabilities. Its recent acquisition of remanufacturing specialist SRC of Lexington, Inc., will help strengthen its remanufacturing capabilities in North America and tap the growing demand for remanufactured components.
Over the long term, Komatsu remains well-positioned due to its focus on technological innovation, automation and portfolio expansion. It is accelerating the next generation of autonomous mining equipment through the advancement of a software-defined vehicle strategy.
Aftermarket business sales account for about 50% of sales in construction, mining and utility equipment and around two-thirds of mining equipment revenues. The company plans to build its aftermarket business alongside new equipment sales and establish a profit structure less vulnerable to fluctuations in demand for new equipment.
How do Estimates Compare for CAT & KMTUY?
The Zacks Consensus Estimate for Caterpillar’s 2026 earnings is $24.62 per share, indicating year-over-year growth of 29.2%. The estimate for 2027 of $30.61 suggests a rise of 24.3%. EPS estimates for Caterpillar for both 2026 and 2027 have been trending north over the past 60 days.
The Zacks Consensus Estimate for Komatsu’s fiscal 2026 earnings is $2.59 per share, indicating a year-over-year fall of 5.8%. The fiscal 2027 estimate of $2.83 implies growth of 9.27%.
Image Source: Zacks Investment Research
Both estimates for Caterpillar for fiscal 2026 and 2027 have been trending north over the past 30 days. The estimates for Komatsu for fiscal 2026 and fiscal 2027 have moved down.
Caterpillar & Komatsu: Price Performance, Valuation & Other Comparisons
In the past year, CAT stock has gained 161.1%, whereas KMTUY has gained 39%.
Image Source: Zacks Investment Research
Caterpillar is currently trading at a forward 12-month earnings multiple of 34.13X. Komatsu stock is trading at a forward 12-month earnings multiple of 16.10X.
Image Source: Zacks Investment Research
CAT’s ROE 48.21% is higher than KMTUY’s 10.83%.
Image Source: Zacks Investment Research
Caterpillar or Komatsu: Which Stock is Better for Your Portfolio?
Both Caterpillar and Komatsu are industry leaders with strong global footprints, diversified end markets and growing investments in automation, digital technologies and aftermarket services. Over the long term, both companies stand to benefit from infrastructure spending, mining activity and the increasing adoption of autonomous equipment.
Caterpillar has delivered revenue growth over the past three quarters and earnings growth in two quarters, with expectations of low double-digit revenue growth in 2026. Komatsu, while strategically well-positioned and actively expanding its North American footprint and aftermarket business, is facing a more challenging operating environment. Higher tariff-related costs, weaker profitability trends and management’s expectation for lower sales and net income in fiscal 2026 are weighing on its near-term prospects.
Although Komatsu trades at a significantly lower valuation, Caterpillar’s superior earnings momentum, stronger profitability, higher return on equity and more favorable estimate trends justify its premium multiple. For investors seeking the stronger combination of growth, earnings visibility and execution, Caterpillar appears to be the more compelling choice at present.
Caterpillar currently sports a Zacks Rank #1 (Strong Buy) while Komatsu currently carries a Zacks Rank #4 (Sell).
View the Zacks #1 Rank List
Image: Bigstock
Caterpillar vs. Komatsu: Which Heavy Equipment Stock is the Better Buy?
Key Takeaways
Caterpillar Inc. (CAT - Free Report) and Komatsu Ltd. (KMTUY - Free Report) are among the world’s leading manufacturers of construction and mining equipment, with Caterpillar holding the top position and Komatsu close behind. Both companies are globally recognized for their signature yellow machinery and serve diverse end markets such as infrastructure, construction, mining, oil and gas and industrial applications.
Illinois-based Caterpillar has a market capitalization of $430 billion, whereas Tokyo, Japan-based Komatsu has a market capitalization of $38 billion. Around 80% of KMTUY’s revenues are generated outside of Japan, underscoring its strong international presence.
Both are closely watched by investors to gauge the health of the broader manufacturing and infrastructure landscape, especially during periods of economic uncertainty. The question is which stock you should put your money on. To find out, let us dive into the fundamentals, growth prospects and challenges of both Caterpillar and Komatsu.
The Case for Caterpillar
Caterpillar has delivered positive revenue growth over the past three quarters and earnings growth in the past two. In the first quarter of 2026, the company generated roughly $17.4 billion in revenues, up 22% year over year, driven by higher sales volumes across its businesses. Adjusted earnings per share climbed 30.4% to $5.54, accelerating sharply from the modest 0.4% increase reported in fourth-quarter 2025. The performance was particularly notable given the estimated $600 million tariff impact during the quarter.
For 2026, Caterpillar expects revenue growth in the low double-digits compared with 2025. Adjusted operating margin is, however, projected toward the lower end of its range, due to continued tariff pressures, which are expected to create a full-year headwind of approximately $2.2-$2.4 billion.
At an annual revenue base of roughly $60 billion, Caterpillar expects adjusted operating margins between 15% and 19%. If revenues reach $72 billion, margins could improve to 18-22%, while a stronger scenario with $100 billion in revenues could support margins of 21-25%.
The company has also raised its long-term revenue CAGR target to 6-9% through 2030, compared with its earlier 5-7% outlook shared at Investor Day. Operational targets include growing Construction Industries’ sales to users by 1.25x from 2024 levels by 2030, tripling autonomous trucks in Resource Industries, and increasing Power Generation sales from 1.3x to more than 3x.
Connected assets are expected to rise from more than 1.6 million to 2 million, while e-commerce sales per business day are projected to jump from 4% to more than 50% by 2030. Services revenues are targeted to rise from $24 billion in 2025 to $30 billion by 2030.
Caterpillar’s growth is expected to be driven by U.S. infrastructure spending, mining demand linked to energy transition, automation adoption and rising data center and sustainability-related investments.
The Case for Komatsu
KMTUY’s revenues in the fourth quarter of fiscal 2025 (ended March 31, 2026) came in at around JPY 1.217 billion ($7.76 billion), marking a 6% rise on a year-over-year basis. Komatsu’s Construction, Mining & Utility Equipment sales increased 6.5% in the quarter, while Industrial Machinery & Others sales decreased 1.2%. The company reported earnings per share of 75 cents, which were down 18% year over year. Although Komatsu has been delivering sales growth in the last two quarters, earnings continue to remain under pressure.
For fiscal 2025, Construction, Mining & Utility Equipment sales inched up 0.2%, but the metric was mainly led by higher prices, which helped offset the impact of low volumes. Segment profit declined due to higher costs reflecting tariffs.
Komatsu anticipates Construction, Mining & Utility Equipment sales to dip 0.4% in fiscal 2026 as well, reflecting lower sales volumes citing the situation in the Middle East. Growth in North America will be offset by lower sales in the Middle East and Asia. Segment profit will decrease 10.4%. Industrial Machinery and Others sales will inch up 0.1% while segment profit will be down 2.5%. Net income attributable to Komatsu will be down 15.5%.
Around 50% of products sold in the United States are imported (mainly from Japan and China), making it vulnerable to the U.S tariffs. Komatsu expects to suffer annual negative impacts of 37.8 billion yen ($0.24 billion) from increased costs linked to U.S. tariffs.
Over the past decade, Komatsu has invested more than $5 billion in the North American manufacturing industry by adding companies to the Komatsu group. The company has invested more than $650 million in North American infrastructure to upgrade facilities and strengthen operational capabilities. Its recent acquisition of remanufacturing specialist SRC of Lexington, Inc., will help strengthen its remanufacturing capabilities in North America and tap the growing demand for remanufactured components.
Over the long term, Komatsu remains well-positioned due to its focus on technological innovation, automation and portfolio expansion. It is accelerating the next generation of autonomous mining equipment through the advancement of a software-defined vehicle strategy.
Aftermarket business sales account for about 50% of sales in construction, mining and utility equipment and around two-thirds of mining equipment revenues. The company plans to build its aftermarket business alongside new equipment sales and establish a profit structure less vulnerable to fluctuations in demand for new equipment.
How do Estimates Compare for CAT & KMTUY?
The Zacks Consensus Estimate for Caterpillar’s 2026 earnings is $24.62 per share, indicating year-over-year growth of 29.2%. The estimate for 2027 of $30.61 suggests a rise of 24.3%. EPS estimates for Caterpillar for both 2026 and 2027 have been trending north over the past 60 days.
The Zacks Consensus Estimate for Komatsu’s fiscal 2026 earnings is $2.59 per share, indicating a year-over-year fall of 5.8%. The fiscal 2027 estimate of $2.83 implies growth of 9.27%.
Image Source: Zacks Investment Research
Both estimates for Caterpillar for fiscal 2026 and 2027 have been trending north over the past 30 days. The estimates for Komatsu for fiscal 2026 and fiscal 2027 have moved down.
Caterpillar & Komatsu: Price Performance, Valuation & Other Comparisons
In the past year, CAT stock has gained 161.1%, whereas KMTUY has gained 39%.
Image Source: Zacks Investment Research
Caterpillar is currently trading at a forward 12-month earnings multiple of 34.13X. Komatsu stock is trading at a forward 12-month earnings multiple of 16.10X.
Image Source: Zacks Investment Research
CAT’s ROE 48.21% is higher than KMTUY’s 10.83%.
Image Source: Zacks Investment Research
Caterpillar or Komatsu: Which Stock is Better for Your Portfolio?
Both Caterpillar and Komatsu are industry leaders with strong global footprints, diversified end markets and growing investments in automation, digital technologies and aftermarket services. Over the long term, both companies stand to benefit from infrastructure spending, mining activity and the increasing adoption of autonomous equipment.
Caterpillar has delivered revenue growth over the past three quarters and earnings growth in two quarters, with expectations of low double-digit revenue growth in 2026. Komatsu, while strategically well-positioned and actively expanding its North American footprint and aftermarket business, is facing a more challenging operating environment. Higher tariff-related costs, weaker profitability trends and management’s expectation for lower sales and net income in fiscal 2026 are weighing on its near-term prospects.
Although Komatsu trades at a significantly lower valuation, Caterpillar’s superior earnings momentum, stronger profitability, higher return on equity and more favorable estimate trends justify its premium multiple. For investors seeking the stronger combination of growth, earnings visibility and execution, Caterpillar appears to be the more compelling choice at present.
Caterpillar currently sports a Zacks Rank #1 (Strong Buy) while Komatsu currently carries a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank stocks here.