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Caterpillar (CAT) Dips More Than Broader Markets: What You Should Know

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Caterpillar (CAT - Free Report) closed at $178.71 in the latest trading session, marking a -1.92% move from the prior day. This change lagged the S&P 500's 0.19% loss on the day. Elsewhere, the Dow lost 0.49%, while the tech-heavy Nasdaq added 0.45%.

Coming into today, shares of the construction equipment company had gained 11.72% in the past month. In that same time, the Industrial Products sector gained 12.38%, while the S&P 500 gained 7.68%.

Wall Street will be looking for positivity from CAT as it approaches its next earnings report date. The company is expected to report EPS of $1.45, down 44.87% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $11.11 billion, down 15.47% from the prior-year quarter.

For the full year, our Zacks Consensus Estimates are projecting earnings of $5.43 per share and revenue of $41.47 billion, which would represent changes of -50.9% and -22.92%, respectively, from the prior year.

Investors might also notice recent changes to analyst estimates for CAT. Recent revisions tend to reflect the latest near-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. 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. The Zacks Consensus EPS estimate has moved 0.4% higher within the past month. CAT is currently sporting a Zacks Rank of #3 (Hold).

Investors should also note CAT's current valuation metrics, including its Forward P/E ratio of 33.54. For comparison, its industry has an average Forward P/E of 29.49, which means CAT is trading at a premium to the group.

We can also see that CAT currently has a PEG ratio of 2.79. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. The Manufacturing - Construction and Mining was holding an average PEG ratio of 6.58 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 106, putting it in the top 42% of all 250+ industries.

The Zacks Industry Rank includes is listed in order 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.

Make sure to utilize Zacks. Com to follow all of these stock-moving metrics, and more, in the coming trading sessions.

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