11:35 AM EDT, 10/22/2025 (MT Newswires) -- Caterpillar ( CAT ) stock price has priced in its growth prospects following a valuation expansion over the past three years, RBC Dominion Securities said in a note Tuesday.

"While we believe CAT is well-positioned against what

we see as a generally mid-cycle operating backdrop (data center exposure provides an interesting growth angle), we believe that these expectations are appropriately reflected in the valuation today," the report said.

"We remain on the sidelines until a more attractive entry point."

The report pointed to its forward price-to-earnings ratio that has climbed to about 25.5 times from an average of around 15.8 times over the past three years.

The note added that much of the increase seemed to be driven by investor interest in the data center theme.

RBC initiated coverage on Caterpillar ( CAT ) with a sector perform rating and a $560 price target.

Price: 514.00, Change: -10.65, Percent Change: -2.03