In the latest trading session, Caterpillar (CAT) closed at $889.97, marking a +2.97% move from the previous day. The stock outpaced the S&P 500's daily gain of 0.89%. Elsewhere, the Dow saw an upswing of 0.74%, while the tech-heavy Nasdaq appreciated by 1.29%.
Coming into today, shares of the construction equipment company had lost 15.45% in the past month. In that same time, the Industrial Products sector lost 5.7%, while the S&P 500 lost 0.63%.
Analysts and investors alike will be keeping a close eye on the performance of Caterpillar in its upcoming earnings disclosure. The company is forecasted to report an EPS of $6.25, showcasing a 32.42% upward movement from the corresponding quarter of the prior year. Meanwhile, the latest consensus estimate predicts the revenue to be $19.31 billion, indicating a 16.56% increase compared to the same quarter of the previous year.
For the annual period, the Zacks Consensus Estimates anticipate earnings of $24.87 per share and a revenue of $77.17 billion, signifying shifts of +30.48% and +14.18%, respectively, from the last year.
Investors should also pay attention to any latest changes in analyst estimates for Caterpillar. These latest adjustments often mirror the shifting dynamics of short-term business patterns. With this in mind, we can consider positive estimate revisions a sign of optimism about the business outlook.
Our research suggests that these changes in estimates have a direct relationship with upcoming stock price performance. To capitalize on this, we've crafted the Zacks Rank, a unique model that incorporates these estimate changes and offers a practical rating system.
The Zacks Rank system, spanning from #1 (Strong Buy) to #5 (Strong Sell), boasts an impressive track record of outperformance, audited externally, with #1 ranked stocks yielding an average annual return of +25% since 1988. Over the past month, there's been a 0.91% rise in the Zacks Consensus EPS estimate. Right now, Caterpillar possesses a Zacks Rank of #2 (Buy).
From a valuation perspective, Caterpillar is currently exchanging hands at a Forward P/E ratio of 34.76. For comparison, its industry has an average Forward P/E of 15.02, which means Caterpillar is trading at a premium to the group.
Meanwhile, CAT's PEG ratio is currently 1.69. The PEG ratio bears resemblance to the frequently used P/E ratio, but this parameter also includes the company's expected earnings growth trajectory. The Manufacturing - Construction and Mining industry had an average PEG ratio of 1.52 as trading concluded yesterday.
The Manufacturing - Construction and Mining industry is part of the Industrial Products sector. At present, this industry carries a Zacks Industry Rank of 100, placing it within the top 41% of over 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.
Ensure to harness Zacks.com to stay updated with all these stock-shifting metrics, among others, in the next trading sessions.
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Caterpillar Inc. (CAT): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).