U.S. Markets closed

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

Zacks Equity Research

In the latest trading session, Caterpillar (CAT) closed at $131.07, marking a -0.83% move from the previous day. This change lagged the S&P 500's 0.03% gain on the day. Elsewhere, the Dow gained 0.13%, while the tech-heavy Nasdaq lost 0.11%.

Heading into today, shares of the construction equipment company had gained 13.28% over the past month, outpacing the Industrial Products sector's gain of 6.95% and the S&P 500's gain of 4.17% in that time.

Wall Street will be looking for positivity from CAT as it approaches its next earnings report date. This is expected to be October 23, 2019. The company is expected to report EPS of $2.89, up 1.05% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $13.53 billion, up 0.16% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $11.69 per share and revenue of $55.99 billion. These totals would mark changes of +4.19% and +2.32%, respectively, from last year.

Investors should also note any recent changes to analyst estimates for CAT. Recent revisions tend to reflect the latest 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. 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 0.24% lower. CAT is currently sporting a Zacks Rank of #3 (Hold).

In terms of valuation, CAT is currently trading at a Forward P/E ratio of 11.31. Its industry sports an average Forward P/E of 10.71, so we one might conclude that CAT is trading at a premium comparatively.

Also, we should mention that CAT has a PEG ratio of 0.94. 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. Manufacturing - Construction and Mining stocks are, on average, holding a PEG ratio of 0.94 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 176, putting it in the bottom 32% 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.


Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
Caterpillar Inc. (CAT) : Free Stock Analysis Report
 
To read this article on Zacks.com click here.