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

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Caterpillar (CAT) closed at $207.96 in the latest trading session, marking a -1.38% move from the prior day. This move lagged the S&P 500's daily gain of 0.03%.

Prior to today's trading, shares of the construction equipment company had gained 1.14% over the past month. This has lagged the Industrial Products sector's gain of 2.66% and the S&P 500's gain of 3.02% in that time.

Investors will be hoping for strength from CAT as it approaches its next earnings release. On that day, CAT is projected to report earnings of $2.29 per share, which would represent year-over-year growth of 70.9%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $12.48 billion, up 26.29% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $10.08 per share and revenue of $50.82 billion. These totals would mark changes of +53.66% and +21.73%, respectively, from last year.

Any recent changes to analyst estimates for CAT should also be noted by investors. These revisions typically reflect the latest short-term business trends, which can change frequently. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Our research shows that these estimate changes are directly correlated with near-term stock prices. 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.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 0.8% higher. CAT currently has a Zacks Rank of #3 (Hold).

Valuation is also important, so investors should note that CAT has a Forward P/E ratio of 20.92 right now. Its industry sports an average Forward P/E of 20.97, so we one might conclude that CAT is trading at a discount comparatively.

Investors should also note that CAT has a PEG ratio of 1.74 right now. 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. The Manufacturing - Construction and Mining industry currently had an average PEG ratio of 1.19 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 186, putting it in the bottom 27% 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.

To follow CAT in the coming trading sessions, be sure to utilize Zacks.com.


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