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Caterpillar (CAT) Gains But Lags Market: What You Should Know

Zacks.com logo Zacks.com 4/9/2021

In the latest trading session, Caterpillar (CAT) closed at $230.75, marking a +0.12% move from the previous day. This change lagged the S&P 500's 0.77% gain on the day.

Coming into today, shares of the construction equipment company had gained 4.23% in the past month. In that same time, the Industrial Products sector gained 3.57%, while the S&P 500 gained 7.34%.

Wall Street will be looking for positivity from CAT as it approaches its next earnings report date. In that report, analysts expect CAT to post earnings of $1.89 per share. This would mark year-over-year growth of 18.13%. Our most recent consensus estimate is calling for quarterly revenue of $10.87 billion, up 2.25% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $8.09 per share and revenue of $46.1 billion. These totals would mark changes of +23.32% and +10.43%, respectively, from last year.

Investors should also note any recent changes to analyst estimates for CAT. Recent revisions tend to reflect the latest near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. 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 ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection has moved 0.67% higher. 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 28.5. This represents a premium compared to its industry's average Forward P/E of 22.12.

Meanwhile, CAT's PEG ratio is currently 2.37. 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. Manufacturing - Construction and Mining stocks are, on average, holding a PEG ratio of 2.2 based on yesterday's closing prices.

The Manufacturing - Construction and Mining industry is part of the Industrial Products sector. This industry currently has a Zacks Industry Rank of 94, which puts it in the top 38% 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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