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Caterpillar (CAT) Stock Moves -0.72%: What You Should Know

Zacks Equity Research
·3 min read

Caterpillar (CAT) closed the most recent trading day at $167.53, moving -0.72% from the previous trading session. This change was narrower than the S&P 500's daily loss of 1.63%. Elsewhere, the Dow lost 1.44%, while the tech-heavy Nasdaq lost 1.65%.

Coming into today, shares of the construction equipment company had gained 9.67% in the past month. In that same time, the Industrial Products sector gained 7.23%, while the S&P 500 gained 2.86%.

CAT will be looking to display strength as it nears its next earnings release, which is expected to be October 27, 2020. The company is expected to report EPS of $1.14, down 57.14% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $9.64 billion, down 24.42% from the prior-year quarter.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $5.23 per share and revenue of $41.38 billion. These totals would mark changes of -52.71% and -23.09%, respectively, from last year.

Investors might also notice recent changes to analyst estimates for CAT. These revisions help to show the ever-changing nature of 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. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, 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. Over the past month, the Zacks Consensus EPS estimate has moved 0.03% lower. CAT is holding a Zacks Rank of #3 (Hold) right now.

Valuation is also important, so investors should note that CAT has a Forward P/E ratio of 32.29 right now. For comparison, its industry has an average Forward P/E of 31.25, which means CAT is trading at a premium to the group.

Investors should also note that CAT has a PEG ratio of 2.69 right now. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. The Manufacturing - Construction and Mining industry currently had an average PEG ratio of 10.25 as of yesterday's close.

The Manufacturing - Construction and Mining industry is part of the Industrial Products sector. This group has a Zacks Industry Rank of 181, putting it in the bottom 29% 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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