While declines in the mining business and reduced dealer inventories bit into earnings in the second quarter, JPMorgan analyst Ann Duignan also sees an opportunity to buy the shares as the global economy stabilizes.
Another thing investors should start considering "is that the fundamentals in Europe are starting to look at bit better," she told CNBC. "So we think that we have seen a bottom in the global macro data, and going forward we think that as this gets better, sentiment on Caterpillar's stock is better, and so we are a buyer today."
Lustgarten isn't predicting a rebound in mining anytime soon, he said that "the power systems and the construction side are where the leverages is, and the key is that earnings don't continue to go down next year."
A leveling off of dealer inventory adjustments should also help.
"While the sales headwinds from these dealer inventory adjustments look to continue at a similar magnitude over the remainder of the year, CAT's production (and resulting profitability) should improve sequentially as the firm aims to maintain the current level of its own inventory rather than further reduce this line item," Morningstar analyst Adam Fleck wrote in a note.
Longbow has a $104 price target on the stock and estimates earnings per share of $7.50, which Lustgarten said "is not a big multiple." That price target implies about 24 percent upside from current levels.
"If they can deliver, the stock has some upside," he added.
—By CNBC's Justin Menza. Follow him on Twitter