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InvestorsObserver rates Caterpillar Inc. (CAT) with a strong rating of 63 from its analysis. The proprietary rating system takes into account the underlying health of a company by analyzing its share price, earnings and growth rate. CAT currently holds better than 63% of its stock based on these metrics. Long-term investors who focus on buy-and-holding should find the review ranking system most relevant to their investment decisions.
Today CAT has a rating of 63. Find out what that means for you and get the rest of the rankings on CAT!
CAT’s price-to-earnings ratio (PE) over the past 12 months of 26.7 is above its historical average of around 15. CAT is poor value at its current trading price as investors pay more than it is relative to the The company’s profit is worth it. CAT’s earnings per share (EPS) over the past 12 months of 7.96 doesn’t justify what it is currently trading in the market for. However, the trailing P / E ratios do not take into account a company’s projected growth rate, causing some companies to have high P / E ratios due to high growth, which can potentially attract investors even when ongoing earnings are low. CAT currently has a 12-month Forward PE-to-Growth Ratio (PEG) of 1.78. The market is currently overvaluing CAT in terms of forecast growth as the PEG rate is above the fair market value of 1. CAT’s PEG is the forward price-earnings ratio divided by its growth rate. Because the PEG metrics contain more fundamentals of a company’s overall health with an added focus on the future, they are one of the most widely used valuation metrics by analysts.
CAT ‘is weakly valued at the current share price due to an overvalued PEG rate despite strong growth. CAT’s P / E and PEG are worse than the market average, resulting in a below average rating. For the full report on Caterpillar Inc. (CAT) stock click here.