Caterpillar (CAT) closed the most recent trading day at $120.74, moving -1.37% from the previous trading session. This change lagged the S&P 500's daily loss of 0.21%. At the same time, the Dow lost 0.58%, and the tech-heavy Nasdaq lost 0.46%.
CAT will be looking to display strength as it nears its next earnings release. The company is expected to report EPS of $0.69, down 75.62% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $9.05 billion, down 37.28% from the year-ago period.
For the full year, our Zacks Consensus Estimates are projecting earnings of $4.99 per share and revenue of $40.85 billion, which would represent changes of -54.88% and -24.07%, respectively, from the prior year.
It is also important to note the recent changes to analyst estimates for CAT. These revisions typically reflect the latest short-term business trends, which can change frequently. As a result, we can interpret positive estimate revisions as a good sign for 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.
Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Within the past 30 days, our consensus EPS projection has moved 19.75% lower. CAT is holding a Zacks Rank of #5 (Strong Sell) right now.
In terms of valuation, CAT is currently trading at a Forward P/E ratio of 24.53. Its industry sports an average Forward P/E of 20.14, 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 2.04. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. CAT's industry had an average PEG ratio of 2.98 as of yesterday's close.
The Manufacturing - Construction and Mining industry is part of the Industrial Products sector. This group has a Zacks Industry Rank of 208, putting it in the bottom 19% 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.
To follow CAT in the coming trading sessions, be sure to utilize Zacks.com.
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