Caterpillar (CAT) Registers a Bigger Fall Than the Market: Important Facts to Note

In the latest trading session, Caterpillar (CAT) closed at $805.00, marking a -1.29% move from the previous day. The stock trailed the S&P 500, which registered a daily loss of 0.59%. On the other hand, the Dow registered a loss of 0.6%, and the technology-centric Nasdaq decreased by 0.65%.

The construction equipment company's shares have seen a decrease of 4.68% over the last month, surpassing the Industrial Products sector's loss of 5.26% and falling behind the S&P 500's loss of 1.37%.

Market participants will be closely following the financial results of Caterpillar in its upcoming release. The company's earnings per share (EPS) are projected to be $6.95, reflecting a 40.4% increase from the same quarter last year. At the same time, our most recent consensus estimate is projecting a revenue of $20.19 billion, reflecting a 14.47% rise from the equivalent quarter last year.

For the full year, the Zacks Consensus Estimates project earnings of $27.37 per share and a revenue of $79.37 billion, demonstrating changes of +43.6% and +17.43%, respectively, from the preceding year.

Additionally, investors should keep an eye on any recent revisions to analyst forecasts for Caterpillar. These revisions typically reflect the latest short-term business trends, which can change frequently. As such, positive estimate revisions reflect analyst optimism about the business and profitability.

Our research shows that these estimate changes are directly correlated with near-term stock prices. To take advantage of this, we've established the Zacks Rank, an exclusive model that considers these estimated changes and delivers an operational rating system.

The Zacks Rank system, spanning from #1 (Strong Buy) to #5 (Strong Sell), boasts an impressive track record of outperformance, audited externally, with #1 ranked stocks yielding an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection has moved 3.06% higher. Caterpillar is currently a Zacks Rank #1 (Strong Buy).

Digging into valuation, Caterpillar currently has a Forward P/E ratio of 29.8. This expresses a premium compared to the average Forward P/E of 17.83 of its industry.

Meanwhile, CAT's PEG ratio is currently 1.41. 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. As the market closed yesterday, the Manufacturing - Construction and Mining industry was having an average PEG ratio of 1.28.

The Manufacturing - Construction and Mining industry is part of the Industrial Products sector. At present, this industry carries a Zacks Industry Rank of 101, placing it within the top 42% of over 250 industries.

The Zacks Industry Rank assesses the vigor of our specific industry groups by computing the average Zacks Rank of the individual stocks incorporated in 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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This article originally published on Zacks Investment Research (zacks.com).

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