Back to top

Caterpillar (CAT) Dips More Than Broader Markets: What You Should Know

Read MoreHide Full Article

Caterpillar (CAT - Free Report) closed the most recent trading day at $125.61, moving -0.84% from the previous trading session. This move lagged the S&P 500's daily loss of 0.12%. At the same time, the Dow lost 0.33%, and the tech-heavy Nasdaq gained 0.08%.

Heading into today, shares of the construction equipment company had lost 2.73% over the past month, outpacing the Industrial Products sector's loss of 7.92% and the S&P 500's loss of 6.96% in that time.

Investors will be hoping for strength from CAT as it approaches its next earnings release, which is expected to be January 24, 2019. On that day, CAT is projected to report earnings of $2.98 per share, which would represent year-over-year growth of 37.96%. Meanwhile, our latest consensus estimate is calling for revenue of $14.26 billion, up 10.56% from the prior-year quarter.

CAT's full-year Zacks Consensus Estimates are calling for earnings of $11.64 per share and revenue of $54.42 billion. These results would represent year-over-year changes of +69.19% and +19.7%, respectively.

Investors might also notice recent changes to analyst estimates for CAT. Recent revisions tend to reflect the latest near-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

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 remained stagnant within the past month. CAT currently has a Zacks Rank of #4 (Sell).

Valuation is also important, so investors should note that CAT has a Forward P/E ratio of 10.88 right now. This valuation marks a premium compared to its industry's average Forward P/E of 10.66.

We can also see that CAT currently has a PEG ratio of 0.53. 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. CAT's industry had an average PEG ratio of 0.72 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 222, which puts it in the bottom 14% 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.

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




In-Depth Zacks Research for the Tickers Above


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


Caterpillar Inc. (CAT) - free report >>

More from Zacks Tale of the Tape

You May Like

Published in