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

Caterpillar (CAT) closed the most recent trading day at $219.95, moving -0.76% from the previous trading session. This move lagged the S&P 500's daily gain of 0.92%. At the same time, the Dow added 0.51%, and the tech-heavy Nasdaq gained 0.54%.

Prior to today's trading, shares of the construction equipment company had gained 10.13% over the past month. This has outpaced the Industrial Products sector's loss of 0.31% and the S&P 500's loss of 0.85% in that time.

Wall Street will be looking for positivity from Caterpillar as it approaches its next earnings report date. This is expected to be January 28, 2022. In that report, analysts expect Caterpillar to post earnings of $2.23 per share. This would mark year-over-year growth of 5.19%. Meanwhile, our latest consensus estimate is calling for revenue of $13.31 billion, up 18.49% from the prior-year quarter.

Investors should also note any recent changes to analyst estimates for Caterpillar. These recent revisions tend to reflect the evolving nature of short-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

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.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 0.3% higher. Caterpillar currently has a Zacks Rank of #3 (Hold).

Looking at its valuation, Caterpillar is holding a Forward P/E ratio of 18.02. Its industry sports an average Forward P/E of 15.7, so we one might conclude that Caterpillar is trading at a premium comparatively.

We can also see that CAT currently has a PEG ratio of 1.5. 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 0.51 at yesterday's closing price.

The Manufacturing - Construction and Mining industry is part of the Industrial Products sector. This group has a Zacks Industry Rank of 105, putting it in the top 42% 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.

To follow CAT in the coming trading sessions, be sure to utilize Zacks.com.

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