Caterpillar (CAT) Surpasses Market Returns: Some Facts Worth Knowing
Caterpillar (CAT) closed at $402.18 in the latest trading session, marking a +2% move from the prior day. The stock exceeded the S&P 500, which registered a gain of 0.61% for the day. Elsewhere, the Dow saw an upswing of 0.49%, while the tech-heavy Nasdaq appreciated by 0.95%.
The construction equipment company's stock has climbed by 9.96% in the past month, exceeding the Industrial Products sector's gain of 5.35% and the S&P 500's gain of 3.85%.
The investment community will be closely monitoring the performance of Caterpillar in its forthcoming earnings report. The company is expected to report EPS of $4.89, down 18.36% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $16.39 billion, down 1.79% from the prior-year quarter.
CAT's full-year Zacks Consensus Estimates are calling for earnings of $18.73 per share and revenue of $63.25 billion. These results would represent year-over-year changes of -14.47% and -2.41%, respectively.
Investors might also notice recent changes to analyst estimates for Caterpillar. These latest adjustments often mirror the shifting dynamics of short-term business patterns. Hence, positive alterations in estimates signify analyst optimism regarding the business and profitability.
Based on our research, we believe these estimate revisions are directly related to near-term stock moves. 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, which varies between #1 (Strong Buy) and #5 (Strong Sell), carries an impressive track record of exceeding expectations, confirmed by external audits, with stocks at #1 delivering an average annual return of +25% since 1988. The Zacks Consensus EPS estimate has moved 0.16% higher within the past month. Currently, Caterpillar is carrying a Zacks Rank of #3 (Hold).
Investors should also note Caterpillar's current valuation metrics, including its Forward P/E ratio of 21.05. This valuation marks no noticeable deviation compared to its industry average Forward P/E of 21.05.
It is also worth noting that CAT currently has a PEG ratio of 2.62. Comparable to the widely accepted P/E ratio, the PEG ratio also accounts for the company's projected earnings growth. The average PEG ratio for the Manufacturing - Construction and Mining industry stood at 5.28 at the close of the market yesterday.
The Manufacturing - Construction and Mining industry is part of the Industrial Products sector. This group has a Zacks Industry Rank of 90, putting it in the top 37% of all 250+ industries.
The Zacks Industry Rank assesses the strength of our separate industry groups by calculating the average Zacks Rank of the individual stocks contained within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
Keep in mind to rely on Zacks.com to watch all these stock-impacting metrics, and more, in the succeeding trading sessions.
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Caterpillar Inc. (CAT) : Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).
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