In the latest trading session, Caterpillar (CAT) closed at $343.95, marking a +1.16% move from the previous day. The stock trailed the S&P 500, which registered a daily gain of 1.59%. Elsewhere, the Dow saw an upswing of 1.39%, while the tech-heavy Nasdaq appreciated by 1.63%.

The construction equipment company's shares have seen a decrease of 9.33% over the last month, not keeping up with the Industrial Products sector's loss of 7.14% and the S&P 500's loss of 2.42%.

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 $4.32, down 22.86% from the prior-year quarter. In the meantime, our current consensus estimate forecasts the revenue to be $14.65 billion, indicating a 7.29% decline compared to the corresponding quarter of the prior year.

CAT's full-year Zacks Consensus Estimates are calling for earnings of $19.77 per share and revenue of $63.29 billion. These results would represent year-over-year changes of -9.73% and -2.34%, respectively.

Additionally, investors should keep an eye on any recent revisions to analyst forecasts for Caterpillar. Such recent modifications usually signify the changing landscape of near-term business trends. As a result, upbeat changes in estimates indicate analysts' favorable outlook on the company's business health and profitability.

Our research demonstrates that these adjustments in estimates directly associate with imminent stock price performance. To utilize this, we have created the Zacks Rank, a proprietary model that integrates these estimate changes and provides a functional rating system.

The Zacks Rank system, stretching from #1 (Strong Buy) to #5 (Strong Sell), has a noteworthy track record of outperforming, validated by third-party audits, with stocks rated #1 producing an average annual return of +25% since the year 1988. Over the past month, there's been an 8.28% fall in the Zacks Consensus EPS estimate. Caterpillar currently has a Zacks Rank of #4 (Sell).

Looking at valuation, Caterpillar is presently trading at a Forward P/E ratio of 17.2. This indicates a premium in contrast to its industry's Forward P/E of 10.8.

Investors should also note that CAT has a PEG ratio of 1.83 right now. The PEG ratio is akin to the commonly utilized P/E ratio, but this measure also incorporates the company's anticipated earnings growth rate. The Manufacturing - Construction and Mining industry currently had an average PEG ratio of 2.09 as of yesterday's close.

The Manufacturing - Construction and Mining industry is part of the Industrial Products sector. Currently, this industry holds a Zacks Industry Rank of 86, positioning it in the top 35% of all 250+ industries.

The Zacks Industry Rank assesses the vigor of our specific industry groups by computing the average Zacks Rank of the individual stocks incorporated in the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Remember to apply Zacks.com to follow these and more stock-moving metrics during the upcoming trading sessions.

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This article originally published on Zacks Investment Research (zacks.com).

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