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

Zacks Equity Research
·3 mins read

In the latest trading session, Caterpillar (CAT) closed at $146.71, marking a -1.64% move from the previous day. This move lagged the S&P 500's daily gain of 0.53%. Elsewhere, the Dow gained 0.13%, while the tech-heavy Nasdaq added 1.42%.

Prior to today's trading, shares of the construction equipment company had lost 0.08% over the past month. This has was narrower than the Industrial Products sector's loss of 1.03% and the S&P 500's loss of 3.76% in that time.

Investors will be hoping for strength from CAT as it approaches its next earnings release. The company is expected to report EPS of $0.59, down 77.82% from the prior-year quarter. Our most recent consensus estimate is calling for quarterly revenue of $9.52 billion, down 25.37% from the year-ago period.

CAT's full-year Zacks Consensus Estimates are calling for earnings of $5.18 per share and revenue of $41.57 billion. These results would represent year-over-year changes of -53.16% and -22.74%, respectively.

Investors might also notice recent changes to analyst estimates for CAT. 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. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

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 0.17% higher. CAT is holding a Zacks Rank of #3 (Hold) right now.

Looking at its valuation, CAT is holding a Forward P/E ratio of 28.79. For comparison, its industry has an average Forward P/E of 29.36, which means CAT is trading at a discount to the group.

We can also see that CAT currently has a PEG ratio of 2.4. 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 was holding an average PEG ratio of 8.71 at yesterday's closing price.

The Manufacturing - Construction and Mining industry is part of the Industrial Products sector. This group has a Zacks Industry Rank of 66, putting it in the top 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.

You can find more information on all of these metrics, and much more, on Zacks.com.


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Zacks Investment Research