In the latest close session, Caterpillar (CAT) was up +1.97% at $629.77. The stock's performance was ahead of the S&P 500's daily gain of 0.16%. Elsewhere, the Dow gained 0.17%, while the tech-heavy Nasdaq added 0.26%.
The construction equipment company's shares have seen an increase of 3.3% over the last month, not keeping up with the Industrial Products sector's gain of 5.25% and outstripping the S&P 500's gain of 1.89%.
Investors will be eagerly watching for the performance of Caterpillar in its upcoming earnings disclosure. In that report, analysts expect Caterpillar to post earnings of $4.54 per share. This would mark a year-over-year decline of 11.67%. Meanwhile, our latest consensus estimate is calling for revenue of $17.83 billion, up 9.96% from the prior-year quarter.
For the entire fiscal year, the Zacks Consensus Estimates are projecting earnings of $18.51 per share and a revenue of $66.29 billion, representing changes of -15.48% and 0%, respectively, from the prior year.
Investors should also pay attention to any latest changes in analyst estimates for Caterpillar. Recent revisions tend to reflect the latest near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the business outlook.
Our research reveals that these estimate alterations are directly linked with the stock price performance in the near future. To capitalize on this, we've crafted the Zacks Rank, a unique model that incorporates these estimate changes and offers a practical rating system.
The Zacks Rank system, running from #1 (Strong Buy) to #5 (Strong Sell), holds an admirable track record of superior performance, independently audited, with #1 stocks contributing an average annual return of +25% since 1988. Over the last 30 days, the Zacks Consensus EPS estimate has witnessed a 0.77% increase. Caterpillar is currently sporting a Zacks Rank of #2 (Buy).
Looking at its valuation, Caterpillar is holding a Forward P/E ratio of 27.58. This expresses a premium compared to the average Forward P/E of 13.82 of its industry.
We can also see that CAT currently has a PEG ratio of 2.39. Comparable to the widely accepted P/E ratio, the PEG ratio also accounts for the company's projected earnings growth. Manufacturing - Construction and Mining stocks are, on average, holding a PEG ratio of 3.68 based on yesterday's closing prices.
The Manufacturing - Construction and Mining industry is part of the Industrial Products sector. At present, this industry carries a Zacks Industry Rank of 188, placing it within the bottom 24% of over 250 industries.
The Zacks Industry Rank assesses the strength of our separate industry groups by calculating the average Zacks Rank of the individual stocks contained within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
Make sure to utilize Zacks.com to follow all of these stock-moving metrics, and more, in the coming trading sessions.
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Caterpillar Inc. (CAT): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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