Caterpillar (CAT) closed at $125 in the latest trading session, marking a -1.51% move from the prior day. This change was narrower than the S&P 500's 1.97% loss on the day. Elsewhere, the Dow lost 2.32%, while the tech-heavy Nasdaq lost 2.78%.
Prior to today's trading, shares of the construction equipment company had lost 9.97% over the past month. This has lagged the Industrial Products sector's loss of 6.39% and the S&P 500's loss of 3.33% in that time.
Investors will be hoping for strength from CAT as it approaches its next earnings release, which is expected to be January 24, 2019. In that report, analysts expect CAT to post earnings of $2.98 per share. This would mark year-over-year growth of 37.96%. Our most recent consensus estimate is calling for quarterly revenue of $14.26 billion, up 10.56% from the year-ago period.
Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $11.64 per share and revenue of $54.42 billion. These totals would mark changes of +69.19% and +19.7%, respectively, from last year.
Investors should also note any recent changes to analyst estimates for CAT. These recent revisions tend to reflect the evolving nature of short-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. 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.
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. The Zacks Consensus EPS estimate has moved 0.01% lower within the past month. 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 10.9 right now. This valuation marks a discount compared to its industry's average Forward P/E of 11.8.
It is also worth noting that CAT currently has a PEG ratio of 0.7. 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. CAT's industry had an average PEG ratio of 0.84 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 239, putting it in the bottom 7% of all 250+ industries.
The Zacks Industry Rank gauges the strength of our 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.
To follow CAT in the coming trading sessions, be sure to utilize Zacks.com.
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