Caterpillar (CAT) ended the recent trading session at $363.14, demonstrating a +1.27% swing from the preceding day's closing price. The stock's performance was ahead of the S&P 500's daily loss of 0.27%.
The stock of construction equipment company has risen by 1.71% in the past month, lagging the Industrial Products sector's gain of 6.2% and the S&P 500's gain of 6.9%.
The upcoming earnings release of Caterpillar will be of great interest to investors. The company is expected to report EPS of $4.89, down 18.36% from the prior-year quarter. Simultaneously, our latest consensus estimate expects the revenue to be $16.42 billion, showing a 1.59% drop compared to the year-ago quarter.
For the annual period, the Zacks Consensus Estimates anticipate earnings of $18.7 per share and a revenue of $63.25 billion, signifying shifts of -14.61% and -2.41%, respectively, from the last year.
Investors should also take note of any recent adjustments to analyst estimates for Caterpillar. These latest adjustments often mirror the shifting dynamics of short-term business patterns. As a result, upbeat changes in estimates indicate analysts' favorable outlook on the business health and profitability.
Research indicates that these estimate revisions are directly correlated with near-term share price momentum. 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, ranging from #1 (Strong Buy) to #5 (Strong Sell), possesses a remarkable history of outdoing, externally audited, with #1 stocks returning an average annual gain of +25% since 1988. Over the last 30 days, the Zacks Consensus EPS estimate has moved 1.41% lower. Caterpillar currently has a Zacks Rank of #3 (Hold).
Valuation is also important, so investors should note that Caterpillar has a Forward P/E ratio of 19.18 right now. For comparison, its industry has an average Forward P/E of 14.98, which means Caterpillar is trading at a premium to the group.
It is also worth noting 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. The Manufacturing - Construction and Mining industry had an average PEG ratio of 5.07 as trading concluded yesterday.
The Manufacturing - Construction and Mining industry is part of the Industrial Products sector. With its current Zacks Industry Rank of 186, this industry ranks in the bottom 25% of all industries, numbering over 250.
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.
To follow CAT in the coming trading sessions, be sure to utilize 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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