How Will Caterpillar Stock React To Its Q2 Earnings?

Caterpillar (NYSE:CAT) is scheduled to report its earnings on Tuesday, August 5, 2025, before the market opens. Analysis of Caterpillar’s stock performance over the past five years following earnings announcements reveals a notable trend of negative reactions. In 68% of instances, CAT stock has experienced a negative one-day return after results are announced. The median one-day decline has been -3.2%, with a maximum one-day drop of -7.0%.

For event-driven traders, understanding these consistent historical patterns can offer a strategic advantage, although the actual results relative to consensus and expectations will be the ultimate factor. Traders can consider two primary strategies:

• Pre-Earnings Positioning: Evaluate the historical odds and take a position in the stock prior to the earnings release.
• Post-Earnings Positioning: Observe the correlation between immediate and medium-term returns after the earnings are released to inform their subsequent trading decisions.

The consensus analyst estimate for the upcoming quarter is earnings of $4.90 per share on sales of $16.26 billion. This indicates a projected decrease compared to the same quarter last year, which saw earnings of $5.99 per share on sales of $16.69 billion.

As of its latest reporting, Caterpillar has a current market capitalization of $208 billion. Over the last twelve months, the company generated $63 billion in revenue and was operationally profitable, reporting $12 billion in operating profits and a net income of $9.9 billion.

That said, if you seek upside with lower volatility than individual stocks, the Trefis High Quality portfolio presents an alternative — having outperformed the S&P 500 and generated returns exceeding 91% since its inception.

See earnings reaction history of all stocks

Image by Peter Dargatz from Pixabay

Caterpillar’s Historical Odds Of Positive Post-Earnings Return

Some observations on one-day (1D) post-earnings returns:

• There are 19 earnings data points recorded over the last five years, with 6 positive and 13 negative one-day (1D) returns observed. In summary, positive 1D returns were seen about 32% of the time.
• Notably, this percentage increases to 42% if we consider data for the last 3 years instead of 5.
• Median of the 6 positive returns = 3.6%, and median of the 13 negative returns = -3.2%

Additional data for observed 5-Day (5D), and 21-Day (21D) returns post earnings are summarized along with the statistics in the table below.

CAT 1D, 5D, and 21D Post Earnings Return

Correlation Between 1D, 5D and 21D Historical Returns

A relatively less risky strategy (though not useful if the correlation is low) is to understand the correlation between short-term and medium-term returns post earnings, find a pair that has the highest correlation, and execute the appropriate trade. For example, if 1D and 5D show the highest correlation, a trader can position themselves “long” for the next 5 days if the 1D post-earnings return is positive. Here is some correlation data based on a 5-year and a 3-year (more recent) history. Note that the correlation 1D_5D refers to the correlation between 1D post-earnings returns and subsequent 5D returns.

CAT Correlation Between 1D, 5D and 21D Historical Returns

Learn more about Trefis RV strategy that has outperformed its all-cap stocks benchmark (combination of all 3, the S&P 500, S&P mid-cap, and Russell 2000), to produce strong returns for investors. Separately, if you want upside with a smoother ride than an individual stock like Caterpillar, consider the High Quality portfolio, which has outperformed the S&P and clocked >91% returns since inception.

Invest with Trefis Market-Beating Portfolios
See all Trefis Price Estimates