Caterpillar (CAT) Outpaces Stock Market Gains: What You Should Know
Caterpillar (CAT) closed the most recent trading day at $227.10, moving +1.55% from the previous trading session. This change outpaced the S&P 500's 0.95% gain on the day. At the same time, the Dow added 0.8%, and the tech-heavy Nasdaq lost 0.28%.
Prior to today's trading, shares of the construction equipment company had gained 8.41% over the past month. This has outpaced the Industrial Products sector's gain of 2.6% and the S&P 500's gain of 0.1% in that time.
Wall Street will be looking for positivity from Caterpillar as it approaches its next earnings report date. The company is expected to report EPS of $2.99, up 15% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $14.31 billion, up 11.04% from the prior-year quarter.
Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $12.64 per share and revenue of $57.28 billion. These totals would mark changes of +16.93% and +12.39%, respectively, from last year.
It is also important to note the recent changes to analyst estimates for Caterpillar. These revisions help to show the ever-changing nature of near-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.
Research indicates that these estimate revisions are directly correlated with near-term share price momentum. 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.
Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Within the past 30 days, our consensus EPS projection has moved 0.45% higher. Caterpillar currently has a Zacks Rank of #3 (Hold).
Digging into valuation, Caterpillar currently has a Forward P/E ratio of 17.7. For comparison, its industry has an average Forward P/E of 12.73, which means Caterpillar is trading at a premium to the group.
Meanwhile, CAT's PEG ratio is currently 1.47. 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. CAT's industry had an average PEG ratio of 0.46 as of yesterday's close.
The Manufacturing - Construction and Mining industry is part of the Industrial Products sector. This industry currently has a Zacks Industry Rank of 61, which puts it in the top 25% 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.
Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.
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