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Caterpillar (CAT) Gains But Lags Market: What You Should Know

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Caterpillar (CAT - Free Report) closed at $216.46 in the latest trading session, marking a +0.47% move from the prior day. The stock lagged the S&P 500's daily gain of 2.14%. At the same time, the Dow added 1.82%, and the tech-heavy Nasdaq lost 0.01%.

Heading into today, shares of the construction equipment company had gained 7.78% over the past month, outpacing the Industrial Products sector's loss of 2.26% and the S&P 500's loss of 5.01% in that time.

Caterpillar will be looking to display strength as it nears its next earnings release, which is expected to be April 28, 2022. The company is expected to report EPS of $2.66, down 7.32% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $13.54 billion, up 13.91% from the prior-year quarter.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $12.20 per share and revenue of $57.73 billion. These totals would mark changes of +12.86% and +13.26%, respectively, from last year.

Any recent changes to analyst estimates for Caterpillar should also be noted by investors. These revisions typically reflect the latest short-term business trends, which can change frequently. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. 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.

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. Over the past month, the Zacks Consensus EPS estimate remained stagnant. Caterpillar is currently a Zacks Rank #3 (Hold).

Valuation is also important, so investors should note that Caterpillar has a Forward P/E ratio of 17.66 right now. This valuation marks a premium compared to its industry's average Forward P/E of 14.61.

Investors should also note that CAT has a PEG ratio of 1.47 right now. 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 0.46 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 110, putting it in the top 44% 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

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