At the latest market close, Caterpillar (CAT) hit $325.14, up +0.85% from the previous day. The stock outperformed the S&P 500, which posted a 0.25% gain on the day, while the Dow recorded a 0.15% gain and the tech-heavy Nasdaq added 0.03%.
Shares of the construction machinery company have lost 11.12% over the past month, lagging the Industrial Products sector’s loss of 4.58% and the S&P 500’s gain of 3.34%.
Investors will be closely watching Caterpillar’s performance in its upcoming earnings disclosure. The company is expected to report EPS of $5.59, up 0.72% from the year-ago quarter. Meanwhile, our latest consensus estimates are calling for revenue of $16.85 billion, down 2.7% from the year-ago quarter.
For the full year, our Zacks Consensus Estimates are projecting earnings of $21.81 per share and revenue of $67.04 billion, which would represent changes of +2.83% and -0.03%, respectively, from the prior year.
Investors may also want to note any recent changes to analyst estimates for Caterpillar. These revisions help show that short-term business trends are always changing. With this in mind, positive estimate revisions can be considered a sign of optimism for the company’s business outlook.
Our research has shown that these estimate changes are directly correlated to near-term stock price movements.To take advantage of this, we have created the Zacks Rank, a quantitative model which incorporates these estimate changes and presents an actionable rating system.
The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive, independently-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. The Zacks Consensus EPS estimate has moved 0.04% higher within the past month. Caterpillar currently has a Zacks Rank #3 (Hold).
Looking at valuation, Caterpillar is currently trading with a Forward P/E ratio of 14.78, which marks a premium compared to its industry’s average Forward P/E of 9.85.
Additionally, it’s worth noting that CAT currently has a PEG ratio of 1.65. The PEG ratio is similar to the commonly-used P/E ratio, but this metric also incorporates a company’s expected earnings growth rate. As of yesterday’s close, the average PEG ratio in the Manufacturing – Construction and Mining industry was 1.65.
The Manufacturing – Construction and Mining industry is a part of the Industrial Products sector. This group has a Zacks Industry Rank of 190, putting it in the bottom 25% of all 250+ industries.
The Zacks Industry Rank is ordered from best to worst based on the average Zacks Rank of the individual companies within each sector, and our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
To track CAT in the upcoming trading sessions, be sure to utilize Zacks.com.
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Caterpillar Inc. (CAT) : Free Stock Analysis Report
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