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Caterpillar (CAT) Falls More Steeply Than Broader Market: What Investors Need to Know

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Caterpillar (CAT - Free Report) ended the recent trading session at $813.83, demonstrating a -5.75% change from the preceding day's closing price. This change lagged the S&P 500's daily loss of 0.22%. Elsewhere, the Dow saw a downswing of 0.66%, while the tech-heavy Nasdaq depreciated by 0.22%.

Shares of the construction equipment company have appreciated by 4.98% over the course of the past month, outperforming the Industrial Products sector's gain of 0.98%, and the S&P 500's gain of 1.4%.

The investment community will be paying close attention to the earnings performance of Caterpillar in its upcoming release. The company is predicted to post an EPS of $6.95, indicating a 40.4% growth compared to the equivalent quarter last year. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $20.19 billion, up 14.47% from the year-ago period.

For the full year, the Zacks Consensus Estimates project earnings of $27.47 per share and a revenue of $79.37 billion, demonstrating changes of +44.12% and +17.43%, respectively, from the preceding year.

It's also important for investors to be aware of any recent modifications to analyst estimates for Caterpillar. These revisions typically reflect the latest short-term business trends, which can change frequently. Consequently, upward revisions in estimates express analysts' positivity towards the business operations and its ability to generate profits.

Our research demonstrates that these adjustments in estimates directly associate with imminent stock price performance. To capitalize on this, we've crafted the Zacks Rank, a unique model that incorporates these estimate changes and offers a practical rating system.

The Zacks Rank system, ranging from #1 (Strong Buy) to #5 (Strong Sell), possesses a remarkable history of outdoing, externally audited, with #1 stocks returning an average annual gain of +25% since 1988. Over the last 30 days, the Zacks Consensus EPS estimate has moved 0.61% higher. As of now, Caterpillar holds a Zacks Rank of #3 (Hold).

Looking at its valuation, Caterpillar is holding a Forward P/E ratio of 31.43. This indicates a premium in contrast to its industry's Forward P/E of 18.24.

We can also see that CAT currently has a PEG ratio of 1.49. Comparable to the widely accepted P/E ratio, the PEG ratio also accounts for the company's projected earnings growth. As the market closed yesterday, the Manufacturing - Construction and Mining industry was having an average PEG ratio of 1.31.

The Manufacturing - Construction and Mining industry is part of the Industrial Products sector. This group has a Zacks Industry Rank of 71, putting it in the top 29% of all 250+ industries.

The Zacks Industry Rank assesses the strength of our separate industry groups by calculating the average Zacks Rank of the individual stocks contained within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Make sure to utilize Zacks.com to follow all of these stock-moving metrics, and more, in the coming trading sessions.

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