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

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Caterpillar (CAT - Free Report) closed at $217.63 in the latest trading session, marking a +1.18% move from the prior day. The stock outpaced the S&P 500's daily gain of 0.13%.

Coming into today, shares of the construction equipment company had lost 11.39% in the past month. In that same time, the Industrial Products sector lost 1.07%, while the S&P 500 gained 2.16%.

Investors will be hoping for strength from CAT as it approaches its next earnings release. On that day, CAT is projected to report earnings of $2.36 per share, which would represent year-over-year growth of 129.13%. Meanwhile, our latest consensus estimate is calling for revenue of $12.34 billion, up 23.46% from the prior-year quarter.

CAT's full-year Zacks Consensus Estimates are calling for earnings of $9.60 per share and revenue of $49.07 billion. These results would represent year-over-year changes of +46.34% and +17.54%, respectively.

Any recent changes to analyst estimates for CAT should also be noted by investors. Recent revisions tend to reflect the latest near-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. 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, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. The Zacks Consensus EPS estimate has moved 0.63% higher within the past month. CAT is currently sporting a Zacks Rank of #3 (Hold).

Valuation is also important, so investors should note that CAT has a Forward P/E ratio of 22.4 right now. Its industry sports an average Forward P/E of 18.97, so we one might conclude that CAT is trading at a premium comparatively.

We can also see that CAT currently has a PEG ratio of 1.87. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. The Manufacturing - Construction and Mining was holding an average PEG ratio of 1.71 at yesterday's closing price.

The Manufacturing - Construction and Mining industry is part of the Industrial Products sector. This industry currently has a Zacks Industry Rank of 182, which puts it in the bottom 29% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual 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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