Caterpillar (CAT) closed at $398.43 in the latest trading session, marking a +1.92% move from the prior day. This move outpaced the S&P 500's daily gain of 0.48%. Meanwhile, the Dow experienced a drop of 0.02%, and the technology-dominated Nasdaq saw an increase of 0.94%.
Shares of the construction equipment company witnessed a gain of 11.88% over the previous month, beating the performance of the Industrial Products sector with its gain of 6.87%, and the S&P 500's gain of 5.13%.
Investors will be eagerly watching for the performance of Caterpillar in its upcoming earnings disclosure. The company's upcoming EPS is projected at $4.89, signifying a 18.36% drop compared to the same quarter of the previous year. Our most recent consensus estimate is calling for quarterly revenue of $16.39 billion, down 1.79% from the year-ago period.
Regarding the entire year, the Zacks Consensus Estimates forecast earnings of $18.73 per share and revenue of $63.25 billion, indicating changes of -14.47% and -2.41%, respectively, compared to the previous year.
Investors should also note any recent changes to 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 shows that these estimate changes are directly correlated with near-term stock prices. 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, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Over the past month, there's been a 0.02% fall in the Zacks Consensus EPS estimate. Currently, Caterpillar is carrying a Zacks Rank of #3 (Hold).
In terms of valuation, Caterpillar is presently being traded at a Forward P/E ratio of 20.87. This denotes a premium relative to the industry average Forward P/E of 16.43.
It's also important to note that CAT currently trades at a PEG ratio of 2.6. 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 industry currently had an average PEG ratio of 5.12 as of yesterday's close.
The Manufacturing - Construction and Mining industry is part of the Industrial Products sector. This industry, currently bearing a Zacks Industry Rank of 208, finds itself in the bottom 16% 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.
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Caterpillar Inc. (CAT): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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