Caterpillar (CAT) closed at $589.76 in the latest trading session, marking a -1.36% move from the prior day. This change lagged the S&P 500's 0.16% loss on the day. Meanwhile, the Dow lost 0.09%, and the Nasdaq, a tech-heavy index, lost 0.59%.
The stock of construction equipment company has risen by 7.92% in the past month, leading the Industrial Products sector's gain of 2.58% and the S&P 500's loss of 0.21%.
Market participants will be closely following the financial results of Caterpillar in its upcoming release. On that day, Caterpillar is projected to report earnings of $4.54 per share, which would represent a year-over-year decline of 11.67%. At the same time, our most recent consensus estimate is projecting a revenue of $17.84 billion, reflecting a 10% rise from the equivalent quarter last year.
In terms of the entire fiscal year, the Zacks Consensus Estimates predict earnings of $18.42 per share and a revenue of $66.06 billion, indicating changes of -15.89% and +1.93%, respectively, from the former year.
It is also important to note the recent changes to analyst estimates for Caterpillar. These revisions help to show the ever-changing nature of near-term business trends. As a result, upbeat changes in estimates indicate analysts' favorable outlook on the business health and profitability.
Our research demonstrates that these adjustments in estimates directly associate with imminent stock price performance. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.
The Zacks Rank system, which varies between #1 (Strong Buy) and #5 (Strong Sell), carries an impressive track record of exceeding expectations, confirmed by external audits, with stocks at #1 delivering an average annual return of +25% since 1988. Over the last 30 days, the Zacks Consensus EPS estimate has moved 0.16% higher. Caterpillar is currently sporting a Zacks Rank of #3 (Hold).
Looking at valuation, Caterpillar is presently trading at a Forward P/E ratio of 32.46. This denotes a premium relative to the industry average Forward P/E of 14.11.
Investors should also note that CAT has a PEG ratio of 2.82 right now. The PEG ratio bears resemblance to the frequently used P/E ratio, but this parameter also includes the company's expected earnings growth trajectory. By the end of yesterday's trading, the Manufacturing - Construction and Mining industry had an average PEG ratio of 3.77.
The Manufacturing - Construction and Mining industry is part of the Industrial Products sector. With its current Zacks Industry Rank of 194, this industry ranks in the bottom 22% of all industries, numbering over 250.
The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
Be sure to follow all of these stock-moving metrics, and many 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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