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Caterpillar (CAT) Dips More Than Broader Markets: What You Should Know

In the latest trading session, Caterpillar (CAT) closed at $189.84, marking a -0.51% move from the previous day. This move lagged the S&P 500's daily loss of 0.08%.

Prior to today's trading, shares of the construction equipment company had lost 8.76% over the past month. This has lagged the Industrial Products sector's loss of 3.44% and the S&P 500's loss of 1.81% in that time.

Wall Street will be looking for positivity from CAT as it approaches its next earnings report date. On that day, CAT is projected to report earnings of $2.25 per share, which would represent year-over-year growth of 67.91%. Meanwhile, our latest consensus estimate is calling for revenue of $12.59 billion, up 27.43% from the prior-year quarter.

For the full year, our Zacks Consensus Estimates are projecting earnings of $10.08 per share and revenue of $50.82 billion, which would represent changes of +53.66% and +21.73%, respectively, from the prior year.

Any recent changes to analyst estimates for CAT should also be noted by investors. These revisions help to show the ever-changing nature of near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. 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 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 0.04% lower. CAT currently has a Zacks Rank of #3 (Hold).

Digging into valuation, CAT currently has a Forward P/E ratio of 18.94. This represents a discount compared to its industry's average Forward P/E of 19.85.

Also, we should mention that CAT has a PEG ratio of 1.58. 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 1.1 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 190, which puts it in the bottom 26% 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.

You can find more information on all of these metrics, and much more, on Zacks.com.


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