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

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In the latest trading session, Caterpillar (CAT - Free Report) closed at $180.16, marking a -0.44% move from the previous day. This change lagged the S&P 500's daily loss of 0.39%. Meanwhile, the Dow gained 0.12%, and the Nasdaq, a tech-heavy index, lost 0.1%.

Coming into today, shares of the construction equipment company had gained 4.66% in the past month. In that same time, the Industrial Products sector gained 3.61%, while the S&P 500 gained 4.06%.

Wall Street will be looking for positivity from CAT as it approaches its next earnings report date. On that day, CAT is projected to report earnings of $1.43 per share, which would represent a year-over-year decline of 45.63%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $11.14 billion, down 15.27% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $5.41 per share and revenue of $41.49 billion. These totals would mark changes of -51.08% and -22.88%, respectively, from last year.

Any recent changes to analyst estimates for CAT should also be noted by investors. These revisions typically reflect the latest short-term business trends, which can change frequently. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. 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.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Within the past 30 days, our consensus EPS projection has moved 0.06% higher. CAT is currently a Zacks Rank #3 (Hold).

Investors should also note CAT's current valuation metrics, including its Forward P/E ratio of 33.42. For comparison, its industry has an average Forward P/E of 29.09, which means CAT is trading at a premium to the group.

Investors should also note that CAT has a PEG ratio of 2.79 right now. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. CAT's industry had an average PEG ratio of 3.54 as of yesterday's close.

The Manufacturing - Construction and Mining industry is part of the Industrial Products sector. This group has a Zacks Industry Rank of 59, putting it in the top 24% of all 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.

You can find more information on all of these metrics, and much more, on Zacks.com.


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