Caterpillar (CAT) Outpaces Stock Market Gains: What You Should Know
In the latest trading session, Caterpillar (CAT) closed at $113.22, marking a +1.52% move from the previous day. This change outpaced the S&P 500's 0.58% gain on the day. At the same time, the Dow added 0.14%, and the tech-heavy Nasdaq gained 1.66%.
Heading into today, shares of the construction equipment company had gained 11.4% over the past month, outpacing the Industrial Products sector's loss of 2.53% and the S&P 500's gain of 3.15% in that time.
Investors will be hoping for strength from CAT as it approaches its next earnings release, which is expected to be April 28, 2020. The company is expected to report EPS of $1.80, down 38.78% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $11.23 billion, down 16.62% from the prior-year quarter.
For the full year, our Zacks Consensus Estimates are projecting earnings of $6.82 per share and revenue of $44.12 billion, which would represent changes of -38.34% and -17.99%, respectively, from the prior year.
Investors might also notice recent changes to analyst estimates for CAT. Recent revisions tend to reflect the latest near-term business trends. 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. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, 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 has moved 24.07% lower. CAT currently has a Zacks Rank of #4 (Sell).
Looking at its valuation, CAT is holding a Forward P/E ratio of 16.36. This represents a premium compared to its industry's average Forward P/E of 14.62.
Also, we should mention that CAT has a PEG ratio of 1.69. 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. CAT's industry had an average PEG ratio of 5.94 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 243, which puts it in the bottom 5% 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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