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Here's Why Caterpillar (CAT) Gained But Lagged the Market Today

The latest trading session saw Caterpillar (CAT) ending at $328.73, denoting a +0.43% adjustment from its last day's close. This change lagged the S&P 500's 0.85% gain on the day. At the same time, the Dow lost 0.09%, and the tech-heavy Nasdaq gained 1.53%.

Heading into today, shares of the construction equipment company had lost 8.62% over the past month, lagging the Industrial Products sector's loss of 5.33% and the S&P 500's gain of 3.11% in that time.

The investment community will be paying close attention to the earnings performance of Caterpillar in its upcoming release. The company is expected to report EPS of $5.59, up 0.72% from the prior-year quarter. At the same time, our most recent consensus estimate is projecting a revenue of $16.85 billion, reflecting a 2.7% fall from the equivalent quarter last year.

Looking at the full year, the Zacks Consensus Estimates suggest analysts are expecting earnings of $21.81 per share and revenue of $67.04 billion. These totals would mark changes of +2.83% and -0.03%, respectively, from last year.


It's also important for investors to be aware of any recent modifications to analyst estimates for Caterpillar. Such recent modifications usually signify the changing landscape of near-term business trends. Consequently, upward revisions in estimates express analysts' positivity towards the company's business operations and its ability to generate profits.

Our research suggests that these changes in estimates have a direct relationship with upcoming stock price performance. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

The Zacks Rank system, spanning from #1 (Strong Buy) to #5 (Strong Sell), boasts an impressive track record of outperformance, audited externally, with #1 ranked stocks yielding an average annual return of +25% since 1988. The Zacks Consensus EPS estimate has moved 0.09% higher within the past month. Right now, Caterpillar possesses a Zacks Rank of #3 (Hold).

From a valuation perspective, Caterpillar is currently exchanging hands at a Forward P/E ratio of 15.01. This denotes a premium relative to the industry's average Forward P/E of 10.23.

It is also worth noting that CAT currently has a PEG ratio of 1.68. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. As of the close of trade yesterday, the Manufacturing - Construction and Mining industry held an average PEG ratio of 1.68.

The Manufacturing - Construction and Mining industry is part of the Industrial Products sector. Currently, this industry holds a Zacks Industry Rank of 188, positioning it in the bottom 26% of all 250+ industries.

The Zacks Industry Rank evaluates the power of our distinct industry groups by determining the average Zacks Rank of the individual stocks forming the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Keep in mind to rely on to watch all these stock-impacting metrics, and more, in the succeeding trading sessions.

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