Back to top

Image: Bigstock

Caterpillar (CAT) Stock Sinks As Market Gains: What You Should Know

Read MoreHide Full Article

Caterpillar (CAT - Free Report) closed the most recent trading day at $219.01, moving -0.77% from the previous trading session. This change lagged the S&P 500's daily gain of 0.18%.

Coming into today, shares of the construction equipment company had lost 8.89% in the past month. In that same time, the Industrial Products sector lost 0.96%, while the S&P 500 gained 2.43%.

Investors will be hoping for strength from CAT as it approaches its next earnings release. In that report, analysts expect CAT to post earnings of $2.36 per share. This would mark year-over-year growth of 129.13%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $12.34 billion, up 23.46% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $9.72 per share and revenue of $49.07 billion, which would represent changes of +48.17% and +17.54%, respectively, from the prior year.

Investors should also note any recent changes to analyst estimates for CAT. These recent revisions tend to reflect the evolving nature of short-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an 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. Over the past month, the Zacks Consensus EPS estimate has moved 0.47% higher. CAT is holding a Zacks Rank of #2 (Buy) right now.

Digging into valuation, CAT currently has a Forward P/E ratio of 22.71. This represents a premium compared to its industry's average Forward P/E of 19.97.

Investors should also note that CAT has a PEG ratio of 1.89 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. The Manufacturing - Construction and Mining industry currently had an average PEG ratio of 1.8 as of yesterday's close.

The Manufacturing - Construction and Mining industry is part of the Industrial Products sector. This industry currently has a Zacks Industry Rank of 68, which puts it in the top 27% 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.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.


In-Depth Zacks Research for the Tickers Above


Normally $25 each - click below to receive one report FREE:


Caterpillar Inc. (CAT) - free report >>

Published in