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Caterpillar (CAT) Dips More Than Broader Markets: What You Should Know

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In the latest trading session, Caterpillar (CAT) closed at $202.33, marking a -1.88% move from the previous day. This move lagged the S&P 500's daily loss of 0.58%.

Heading into today, shares of the construction equipment company had lost 5.29% over the past month, lagging the Industrial Products sector's loss of 2.13% and the S&P 500's gain of 0.16% in that time.

CAT will be looking to display strength as it nears its next earnings release. On that day, CAT is projected to report earnings of $2.25 per share, which would represent year-over-year growth of 67.91%. Meanwhile, our latest consensus estimate is calling for revenue of $12.48 billion, up 26.29% from the prior-year quarter.

For the full year, our Zacks Consensus Estimates are projecting earnings of $10.08 per share and revenue of $50.82 billion, which would represent changes of +53.66% and +21.73%, respectively, from the prior year.

Investors should also note any recent changes to analyst estimates for CAT. These revisions typically reflect the latest short-term business trends, which can change frequently. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. 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 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, the Zacks Consensus EPS estimate remained stagnant. CAT is currently sporting a Zacks Rank of #3 (Hold).

Investors should also note CAT's current valuation metrics, including its Forward P/E ratio of 20.45. This represents a discount compared to its industry's average Forward P/E of 20.82.

We can also see that CAT currently has a PEG ratio of 1.7. 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 1.17 as of yesterday's close.

The Manufacturing - Construction and Mining industry is part of the Industrial Products sector. This group has a Zacks Industry Rank of 127, putting it in the top 50% of all 250+ industries.

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.

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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