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

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Caterpillar (CAT - Free Report) closed the most recent trading day at $210.73, moving +1.33% from the previous trading session. The stock outpaced the S&P 500's daily gain of 0.82%.

Coming into today, shares of the construction equipment company had lost 2.43% in the past month. In that same time, the Industrial Products sector gained 2.48%, while the S&P 500 gained 3.89%.

CAT will be looking to display strength as it nears its next earnings release, which is expected to be July 30, 2021. On that day, CAT is projected to report earnings of $2.36 per share, which would represent year-over-year growth of 129.13%. Our most recent consensus estimate is calling for quarterly revenue of $12.41 billion, up 24.16% from the year-ago period.

CAT's full-year Zacks Consensus Estimates are calling for earnings of $9.65 per share and revenue of $49.12 billion. These results would represent year-over-year changes of +47.1% and +17.65%, respectively.

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. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. 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 0.47% higher within the past month. CAT is currently sporting a Zacks Rank of #2 (Buy).

Valuation is also important, so investors should note that CAT has a Forward P/E ratio of 21.55 right now. Its industry sports an average Forward P/E of 17.97, so we one might conclude that CAT is trading at a premium comparatively.

Meanwhile, CAT's PEG ratio is currently 1.8. 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 1.65 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 238, putting it in the bottom 7% 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.

To follow CAT in the coming trading sessions, be sure to utilize Zacks.com.


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