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Caterpillar (CAT) closed at $194.62 in the latest trading session, marking a -1.41% move from the prior day. This move lagged the S&P 500's daily loss of 0.72%. Elsewhere, the Dow lost 0.57%, while the tech-heavy Nasdaq lost 0.87%.
Prior to today's trading, shares of the construction equipment company had gained 10.18% over the past month. This has outpaced the Industrial Products sector's gain of 8.95% and the S&P 500's gain of 4.69% in that time.
CAT will be looking to display strength as it nears its next earnings release, which is expected to be January 29, 2021. In that report, analysts expect CAT to post earnings of $1.45 per share. This would mark a year-over-year decline of 44.87%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $11.18 billion, down 14.93% from the year-ago period.
It is also important to note the recent changes to analyst estimates for CAT. 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 company's business outlook.
Our research shows that these estimate changes are directly correlated with near-term stock prices. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.
The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 0.31% higher. CAT is holding a Zacks Rank of #3 (Hold) right now.
Digging into valuation, CAT currently has a Forward P/E ratio of 26.15. This represents a premium compared to its industry's average Forward P/E of 25.86.
Meanwhile, CAT's PEG ratio is currently 2.18. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. Manufacturing - Construction and Mining stocks are, on average, holding a PEG ratio of 3.1 based on yesterday's closing prices.
The Manufacturing - Construction and Mining industry is part of the Industrial Products sector. This industry currently has a Zacks Industry Rank of 37, which puts it in the top 15% 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.
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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