Caterpillar (CAT) Dips More Than Broader Markets: What You Should Know
Caterpillar (CAT) closed the most recent trading day at $114.68, moving -1.76% from the previous trading session. This move lagged the S&P 500's daily loss of 1.51%. Meanwhile, the Dow lost 1.69%, and the Nasdaq, a tech-heavy index, lost 1.53%.
Heading into today, shares of the construction equipment company had lost 4.29% over the past month, outpacing the Industrial Products sector's loss of 22.8% and the S&P 500's loss of 18.13% in that time.
Investors will be hoping for strength from CAT as it approaches its next earnings release, which is expected to be April 28, 2020. The company is expected to report EPS of $1.82, down 38.1% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $11.53 billion, down 14.39% from the year-ago period.
CAT's full-year Zacks Consensus Estimates are calling for earnings of $7.44 per share and revenue of $47.40 billion. These results would represent year-over-year changes of -32.73% and -11.89%, respectively.
Investors might also notice recent changes to analyst estimates for CAT. These recent revisions tend to reflect the evolving nature of short-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.
Based on our research, we believe these estimate revisions are directly related to near-team stock moves. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.
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. Over the past month, the Zacks Consensus EPS estimate has moved 20.98% lower. 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 15.7 right now. For comparison, its industry has an average Forward P/E of 13.38, which means CAT is trading at a premium to the group.
It is also worth noting that CAT currently has a PEG ratio of 1.62. 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 2.93 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 245, putting it in the bottom 4% 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.
Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.