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

·3 min read

Caterpillar (CAT) closed at $183.15 in the latest trading session, marking a +1.27% move from the prior day. The stock outpaced the S&P 500's daily gain of 0.66%. At the same time, the Dow added 0.61%, and the tech-heavy Nasdaq gained 0.08%.

Heading into today, shares of the construction equipment company had lost 5.17% over the past month, lagging the Industrial Products sector's loss of 1.93% and the S&P 500's loss of 3.79% in that time.

Caterpillar will be looking to display strength as it nears its next earnings release, which is expected to be October 27, 2022. In that report, analysts expect Caterpillar to post earnings of $3.23 per share. This would mark year-over-year growth of 21.43%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $14.18 billion, up 14.36% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $12.65 per share and revenue of $57.25 billion, which would represent changes of +17.02% and +12.32%, respectively, from the prior year.

Investors should also note any recent changes to analyst estimates for Caterpillar. These recent revisions tend to reflect the evolving nature of short-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. 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.

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 0.39% lower. Caterpillar is holding a Zacks Rank of #3 (Hold) right now.

Digging into valuation, Caterpillar currently has a Forward P/E ratio of 14.3. Its industry sports an average Forward P/E of 11.52, so we one might conclude that Caterpillar is trading at a premium comparatively.

Also, we should mention that CAT has a PEG ratio of 1.19. 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. Manufacturing - Construction and Mining stocks are, on average, holding a PEG ratio of 0.89 based on yesterday's closing prices.

The Manufacturing - Construction and Mining industry is part of the Industrial Products sector. This group has a Zacks Industry Rank of 211, putting it in the bottom 17% 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.

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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