In the latest trading session, Caterpillar (CAT) closed at $100.12, marking a -0.08% move from the previous day. This change was narrower than the S&P 500's 5.18% loss on the day. Elsewhere, the Dow lost 6.3%, while the tech-heavy Nasdaq lost 4.7%.
Prior to today's trading, shares of the construction equipment company had lost 26.64% over the past month. This has was narrower than the Industrial Products sector's loss of 29.32% and lagged the S&P 500's loss of 24.68% in that time.
CAT will be looking to display strength as it nears its next earnings release, which is expected to be April 28, 2020. The company is expected to report EPS of $1.96, down 33.33% from the prior-year quarter. Our most recent consensus estimate is calling for quarterly revenue of $11.59 billion, down 13.9% from the year-ago period.
For the full year, our Zacks Consensus Estimates are projecting earnings of $8.95 per share and revenue of $49.49 billion, which would represent changes of -19.08% and -8%, respectively, from the prior year.
It is also important to note the recent changes to analyst estimates for CAT. These recent revisions tend to reflect the evolving nature of short-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about 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.
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. The Zacks Consensus EPS estimate has moved 4.17% lower within the past month. CAT currently has a Zacks Rank of #4 (Sell).
Digging into valuation, CAT currently has a Forward P/E ratio of 11.19. Its industry sports an average Forward P/E of 8.62, so we one might conclude that CAT is trading at a premium comparatively.
Also, we should mention that CAT has a PEG ratio of 1.16. 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. Manufacturing - Construction and Mining stocks are, on average, holding a PEG ratio of 1.61 based on yesterday's closing prices.
The Manufacturing - Construction and Mining industry is part of the Industrial Products sector. This industry currently has a Zacks Industry Rank of 231, which puts it in the bottom 10% 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.
Caterpillar Inc. (NYSE:CAT
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Zacks Investment Research