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

In the latest trading session, Caterpillar (CAT) closed at $139.09, marking a -0.39% move from the previous day. This move lagged the S&P 500's daily loss of 0.34%. Elsewhere, the Dow lost 0.09%, while the tech-heavy Nasdaq lost 0.43%.

Coming into today, shares of the construction equipment company had gained 9.68% in the past month. In that same time, the Industrial Products sector lost 1.02%, while the S&P 500 gained 4.46%.

Wall Street will be looking for positivity from CAT as it approaches its next earnings report date. This is expected to be July 24, 2019. The company is expected to report EPS of $3.12, up 5.05% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $14.52 billion, up 3.66% from the prior-year quarter.

CAT's full-year Zacks Consensus Estimates are calling for earnings of $12.19 per share and revenue of $56.91 billion. These results would represent year-over-year changes of +8.65% and +4%, respectively.

Investors should also note any recent changes to analyst estimates for CAT. These revisions help to show the ever-changing nature of near-term business trends. 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. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an 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. The Zacks Consensus EPS estimate has moved 0.46% lower within the past month. CAT currently has a Zacks Rank of #3 (Hold).

Investors should also note CAT's current valuation metrics, including its Forward P/E ratio of 11.46. Its industry sports an average Forward P/E of 11.34, so we one might conclude that CAT is trading at a premium comparatively.

Investors should also note that CAT has a PEG ratio of 0.95 right now. 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 1.05 at yesterday's closing price.

The Manufacturing - Construction and Mining industry is part of the Industrial Products sector. This industry currently has a Zacks Industry Rank of 59, which puts it in the top 24% 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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