Caterpillar (CAT) ended the recent trading session at $706.08, demonstrating a -3.54% change from the preceding day's closing price. The stock fell short of the S&P 500, which registered a loss of 0.57% for the day. Meanwhile, the Dow lost 1.61%, and the Nasdaq, a tech-heavy index, lost 0.26%.
Prior to today's trading, shares of the construction equipment company had gained 5.8% outpaced the Industrial Products sector's gain of 0.8% and the S&P 500's loss of 0.15%.
Investors will be eagerly watching for the performance of Caterpillar in its upcoming earnings disclosure. The company is expected to report EPS of $4.44, up 4.47% from the prior-year quarter. Simultaneously, our latest consensus estimate expects the revenue to be $16.28 billion, showing a 14.27% escalation compared to the year-ago quarter.
In terms of the entire fiscal year, the Zacks Consensus Estimates predict earnings of $22.66 per share and a revenue of $73.63 billion, indicating changes of +18.89% and +8.94%, respectively, from the former year.
Any recent changes to analyst estimates for Caterpillar should also be noted by investors. These revisions typically reflect the latest short-term business trends, which can change frequently. Consequently, upward revisions in estimates express analysts' positivity towards the business operations and its ability to generate profits.
Our research reveals that these estimate alterations are directly linked with the stock price performance in the near future. 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, 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. Over the past month, there's been a 0.3% rise in the Zacks Consensus EPS estimate. Caterpillar is currently sporting a Zacks Rank of #3 (Hold).
Looking at valuation, Caterpillar is presently trading at a Forward P/E ratio of 32.31. Its industry sports an average Forward P/E of 18.64, so one might conclude that Caterpillar is trading at a premium comparatively.
Meanwhile, CAT's PEG ratio is currently 1.73. Comparable to the widely accepted P/E ratio, the PEG ratio also accounts for the company's projected earnings growth. By the end of yesterday's trading, the Manufacturing - Construction and Mining industry had an average PEG ratio of 2.05.
The Manufacturing - Construction and Mining industry is part of the Industrial Products sector. This industry, currently bearing a Zacks Industry Rank of 59, finds itself in the top 25% echelons of all 250+ industries.
The Zacks Industry Rank gauges the strength of our 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.
Don't forget to use Zacks.com to keep track of all these stock-moving metrics, and others, in the upcoming 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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