Caterpillar Inc.

Caterpillar generally enjoys strong pricing power within its markets, as evidenced by historically high operating margins (20%) and the ability to pass input cost inflation to customers. For example, in 2024 Cat reported hitting price increases on large equipment, which helped offset weak volumes in North America).

The 2024 fiscal year had robust adjusted operating margins around 20.7%. Management has signaled it plans to continue raising prices as needed when demand is healthy. However, in the current soft market (2025 so far) Caterpillar has found it harder to push through price hikes.

Reuters notes that tariffs and sluggish demand are constraining Cat’s ability to pass on costs to customers. Recent quarterly reports confirm a slight reduction in price realizations (price-related revenues fell $414M in Q2 2025 vs. prior year)).

In summary, Caterpillar has had strong pricing ability overall, but this is being tested by macro headwinds today.