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Caterpillar (CAT) Outpaces Stock Market Gains: What You Should Know

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Caterpillar (CAT) closed at $181.81 in the latest trading session, marking a +1.79% move from the prior day. The stock outpaced the S&P 500's daily gain of 0.13%. Elsewhere, the Dow gained 0.28%, while the tech-heavy Nasdaq lost 0.06%.

Coming into today, shares of the construction equipment company had lost 3.7% in the past month. In that same time, the Industrial Products sector gained 5.66%, while the S&P 500 gained 5.55%.

Wall Street will be looking for positivity from Caterpillar as it approaches its next earnings report date. This is expected to be August 2, 2022. In that report, analysts expect Caterpillar to post earnings of $2.99 per share. This would mark year-over-year growth of 15%. Our most recent consensus estimate is calling for quarterly revenue of $14.31 billion, up 11.06% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $12.62 per share and revenue of $57.18 billion, which would represent changes of +16.74% and +12.19%, respectively, from the prior 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. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

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, 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. Within the past 30 days, our consensus EPS projection has moved 0.13% lower. Caterpillar currently has a Zacks Rank of #3 (Hold).

In terms of valuation, Caterpillar is currently trading at a Forward P/E ratio of 14.15. This valuation marks a premium compared to its industry's average Forward P/E of 11.1.

We can also see that CAT currently has a PEG ratio of 1.18. 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. The Manufacturing - Construction and Mining was holding an average PEG ratio of 0.9 at yesterday's closing price.

The Manufacturing - Construction and Mining industry is part of the Industrial Products sector. This industry currently has a Zacks Industry Rank of 188, which puts it in the bottom 26% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.


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