Caterpillar (CAT) Increases Despite Market Slip: Here's What You Need to Know

The most recent trading session ended with Caterpillar (CAT) standing at $341.52, reflecting a +1.27% shift from the previouse trading day's closing. This move outpaced the S&P 500's daily loss of 0.19%. At the same time, the Dow added 0.1%, and the tech-heavy Nasdaq lost 0.54%.

The construction equipment company's stock has climbed by 7.8% in the past month, exceeding the Industrial Products sector's gain of 4.2% and the S&P 500's gain of 3.18%.

Analysts and investors alike will be keeping a close eye on the performance of Caterpillar in its upcoming earnings disclosure. On that day, Caterpillar is projected to report earnings of $5.09 per share, which would represent year-over-year growth of 3.67%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $15.97 billion, up 0.69% from the year-ago period.

CAT's full-year Zacks Consensus Estimates are calling for earnings of $21.22 per share and revenue of $67.51 billion. These results would represent year-over-year changes of +0.05% and +0.68%, respectively.

It is also important to note the recent changes to analyst estimates for Caterpillar. These recent revisions tend to reflect the evolving nature of short-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.

The Zacks Rank system, running from #1 (Strong Buy) to #5 (Strong Sell), holds an admirable track record of superior performance, independently audited, with #1 stocks contributing an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection has moved 0.17% higher. Caterpillar is currently a Zacks Rank #3 (Hold).

In the context of valuation, Caterpillar is at present trading with a Forward P/E ratio of 15.9. Its industry sports an average Forward P/E of 10.23, so one might conclude that Caterpillar is trading at a premium comparatively.

One should further note that CAT currently holds a PEG ratio of 1.61. Comparable to the widely accepted P/E ratio, the PEG ratio also accounts for the company's projected earnings growth. The Manufacturing - Construction and Mining industry had an average PEG ratio of 0.96 as trading concluded yesterday.

The Manufacturing - Construction and Mining industry is part of the Industrial Products sector. This industry currently has a Zacks Industry Rank of 46, which puts it in the top 19% of all 250+ industries.

The Zacks Industry Rank assesses the strength of our separate industry groups by calculating the average Zacks Rank of the individual stocks contained within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

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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.

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