Caterpillar (CAT) closed the most recent trading day at $138.85, moving -0.15% from the previous trading session. This move lagged the S&P 500’s daily gain of 0.01%. At the same time, the Dow lost 0.09%, and the tech-heavy Nasdaq gained 0.26%.
Prior to today’s trading, shares of the construction equipment company had gained 0.76% over the past month. This has lagged the Industrial Products sector’s gain of 2.84% and the S&P 500’s gain of 3.73% in that time.
CAT will be looking to display strength as it nears its next earnings release, which is expected to be October 23, 2018. On that day, CAT is projected to report earnings of $2.76 per share, which would represent year-over-year growth of 41.54%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $13.13 billion, up 15.08% from the year-ago period.
CAT’s full-year Zacks Consensus Estimates are calling for earnings of $11.54 per share and revenue of $54.38 billion. These results would represent year-over-year changes of +67.73% and +19.61%, respectively.
Investors might also notice 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.
Our research shows that these estimate changes are directly correlated with near-term stock prices. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.
The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection has moved 0.01% higher. CAT currently has a Zacks Rank of #2 (Buy).
Digging into valuation, CAT currently has a Forward P/E ratio of 12.05. This valuation marks a discount compared to its industry’s average Forward P/E of 14.76.
Also, we should mention that CAT has a PEG ratio of 0.91. 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. The Manufacturing – Construction and Mining industry currently had an average PEG ratio of 0.9 as of yesterday’s close.
The Manufacturing – Construction and Mining industry is part of the Industrial Products sector. This industry currently has a Zacks Industry Rank of 215, which puts it in the bottom 16% 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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