Caterpillar (CAT) closed at $770.17 in the latest trading session, marking a -3.03% move from the prior day. The stock fell short of the S&P 500, which registered a gain of 0.8% for the day. At the same time, the Dow lost 0.15%, and the tech-heavy Nasdaq gained 1.6%.
Coming into today, shares of the construction equipment company had gained 13.14% in the past month. In that same time, the Industrial Products sector gained 8.08%, while the S&P 500 gained 5.15%.
The investment community will be paying close attention to the earnings performance of Caterpillar in its upcoming release. The company is forecasted to report an EPS of $4.54, showcasing a 6.82% upward movement from the corresponding quarter of the prior year. At the same time, our most recent consensus estimate is projecting a revenue of $16.41 billion, reflecting a 15.2% rise from the equivalent quarter last year.
Looking at the full year, the Zacks Consensus Estimates suggest analysts are expecting earnings of $22.85 per share and revenue of $73.59 billion. These totals would mark changes of +19.88% and +8.88%, respectively, from last year.
Investors should also pay attention to any latest changes in analyst estimates for Caterpillar. These recent revisions tend to reflect the evolving nature of short-term business trends. Consequently, upward revisions in estimates express analysts' positivity towards the business operations and its ability to generate profits.
Our research demonstrates that these adjustments in estimates directly associate with imminent stock price performance. 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 last 30 days, the Zacks Consensus EPS estimate has moved 0.62% higher. Caterpillar presently features a Zacks Rank of #3 (Hold).
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 16.46, which means Caterpillar is trading at a premium to the group.
We can additionally observe that CAT currently boasts a PEG ratio of 1.86. The PEG ratio is akin to the commonly utilized P/E ratio, but this measure also incorporates the company's anticipated earnings growth rate. The Manufacturing - Construction and Mining industry had an average PEG ratio of 2.1 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 97, placing it within the top 40% of over 250 industries.
The Zacks Industry Rank is ordered 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.
You can find more information on all of these metrics, and much more, on Zacks.com.
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Caterpillar Inc. (CAT): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).