The latest trading session saw Caterpillar (CAT) ending at $293.45, denoting a +1.48% adjustment from its last day's close. The stock's performance was behind the S&P 500's daily gain of 1.81%. On the other hand, the Dow registered a gain of 1.56%, and the technology-centric Nasdaq increased by 2.06%.
Shares of the construction equipment company have depreciated by 13.25% over the course of the past month, underperforming the Industrial Products sector's loss of 11.25% and the S&P 500's loss of 6.14%.
Market participants will be closely following the financial results of Caterpillar in its upcoming release. The company's earnings per share (EPS) are projected to be $4.32, reflecting a 22.86% decrease from the same quarter last year. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $14.61 billion, down 7.52% from the year-ago period.
For the annual period, the Zacks Consensus Estimates anticipate earnings of $19.68 per share and a revenue of $62.51 billion, signifying shifts of -10.14% and -3.55%, respectively, from the last year.
Furthermore, it would be beneficial for investors to monitor any recent shifts in analyst projections for Caterpillar. These recent revisions tend to reflect the evolving nature of short-term business trends. Hence, positive alterations in estimates signify analyst optimism regarding the company's business and profitability.
Empirical research indicates that these revisions in estimates have a direct correlation with impending stock price performance. To exploit this, we've formed the Zacks Rank, a quantitative model that includes these estimate changes and presents a viable rating system.
The Zacks Rank system, stretching from #1 (Strong Buy) to #5 (Strong Sell), has a noteworthy track record of outperforming, validated by third-party audits, with stocks rated #1 producing an average annual return of +25% since the year 1988. Within the past 30 days, our consensus EPS projection has moved 0.39% lower. Caterpillar is currently a Zacks Rank #3 (Hold).
In terms of valuation, Caterpillar is currently trading at a Forward P/E ratio of 14.69. This expresses no noticeable deviation compared to the average Forward P/E of 14.69 of its industry.
It is also worth noting that CAT currently has a PEG ratio of 1.56. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. The Manufacturing - Construction and Mining was holding an average PEG ratio of 1.84 at yesterday's closing price.
The Manufacturing - Construction and Mining industry is part of the Industrial Products sector. With its current Zacks Industry Rank of 32, this industry ranks in the top 13% of all industries, numbering over 250.
The Zacks Industry Rank evaluates the power of our distinct industry groups by determining the average Zacks Rank of the individual stocks forming the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
You can find more information on all of these metrics, and much more, on Zacks.com.
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Caterpillar Inc. (CAT): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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