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Caterpillar (CAT) Advances But Underperforms Market: Key Facts

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In the latest trading session, Caterpillar (CAT - Free Report) closed at $388.87, marking a +0.12% move from the previous day. The stock's performance was behind the S&P 500's daily gain of 0.82%. Elsewhere, the Dow lost 0.22%, while the tech-heavy Nasdaq added 1.77%.

Heading into today, shares of the construction equipment company had lost 1.18% over the past month, lagging the Industrial Products sector's loss of 0.28% and the S&P 500's gain of 0.8% in that time.

The upcoming earnings release of Caterpillar will be of great interest to investors. The company's upcoming EPS is projected at $5, signifying a 4.4% drop compared to the same quarter of the previous year. Meanwhile, our latest consensus estimate is calling for revenue of $16.65 billion, down 2.44% from the prior-year quarter.

Looking at the full year, the Zacks Consensus Estimates suggest analysts are expecting earnings of $21.68 per share and revenue of $65.25 billion. These totals would mark changes of +2.22% and -2.7%, respectively, from last year.

Investors might also notice recent changes to analyst estimates for Caterpillar. These latest adjustments often mirror the shifting dynamics of short-term business patterns. Therefore, positive revisions in estimates convey analysts' confidence in the company's business performance and profit potential.

Our research demonstrates that these adjustments in estimates directly associate with imminent stock price performance. To utilize this, we have created the Zacks Rank, a proprietary model that integrates these estimate changes and provides a functional rating system.

The Zacks Rank system, ranging from #1 (Strong Buy) to #5 (Strong Sell), possesses a remarkable history of outdoing, externally audited, with #1 stocks returning an average annual gain of +25% since 1988. The Zacks Consensus EPS estimate has moved 0.03% lower within the past month. Caterpillar presently features a Zacks Rank of #3 (Hold).

Looking at its valuation, Caterpillar is holding a Forward P/E ratio of 17.92. This indicates a premium in contrast to its industry's Forward P/E of 10.72.

We can also see that CAT currently has a PEG ratio of 1.92. 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 was holding an average PEG ratio of 4.74 at yesterday's closing price.

The Manufacturing - Construction and Mining industry is part of the Industrial Products sector. With its current Zacks Industry Rank of 239, this industry ranks in the bottom 5% of all industries, numbering over 250.

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.

Don't forget to use Zacks.com to keep track of all these stock-moving metrics, and others, in the upcoming trading sessions.


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