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Caterpillar (CAT) Stock Sinks As Market Gains: What You Should Know

Zacks.com logo Zacks.com 4/15/2021

In the latest trading session, Caterpillar (CAT) closed at $232.52, marking a -0.03% move from the previous day. This change lagged the S&P 500's 1.11% gain on the day.

Coming into today, shares of the construction equipment company had gained 1.28% in the past month. In that same time, the Industrial Products sector gained 0.51%, while the S&P 500 gained 4.72%.

CAT will be looking to display strength as it nears its next earnings release. The company is expected to report EPS of $1.93, up 20.63% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $10.95 billion, up 2.99% from the year-ago period.

CAT's full-year Zacks Consensus Estimates are calling for earnings of $8.23 per share and revenue of $46.58 billion. These results would represent year-over-year changes of +25.46% and +11.58%, respectively.

Any recent changes to analyst estimates for CAT should also be noted by investors. These revisions typically reflect the latest short-term business trends, which can change frequently. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Our research shows that these estimate changes are directly correlated with near-term stock prices. 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 2.43% higher. CAT is currently sporting a Zacks Rank of #2 (Buy).

Digging into valuation, CAT currently has a Forward P/E ratio of 28.01. This valuation marks a premium compared to its industry's average Forward P/E of 22.1.

Meanwhile, CAT's PEG ratio is currently 2.33. 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. The Manufacturing - Construction and Mining was holding an average PEG ratio of 2.16 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 13, which puts it in the top 6% 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.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.

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