Consider Shedding Caterpillar Shares Before Announced Earnings
Caterpillar Inc. (NYSE: CAT) is set to announce its earnings on Tuesday, August 5, 2025, before the market opens. Over the past three years, the company has shown a tendency to experience a negative one-day return after earnings announcements.
According to data spanning a five-year and a three-year history, Caterpillar has recorded a positive one-day return after earnings announcements in approximately 32% of cases, meaning it has experienced a negative one-day return about 68% of the time following earnings releases.
This pattern reflects consistent historical behavior, with the median one-day return following earnings being a negative 3.2%, and the maximum one-day drop observed being 7.0%. This indicates a historical tendency for the stock to decline on the day of earnings announcements.
However, it's important to note that these trends are based on historical data and do not guarantee future performance.
Caterpillar's financial performance has been robust, with the company generating $63 billion in revenue in the past twelve months and reporting a net income of $9.9 billion. The company has also been operationally profitable, with $12 billion in operating profits.
In terms of portfolio performance, the Trefis High Quality portfolio has surpassed the S&P 500 and generated returns exceeding 91% since its launch. The High Quality portfolio has also outperformed the S&P 500 and achieved returns exceeding 91% since its inception. The Trefis RV strategy has also outperformed its all-cap stocks benchmark.
For the forthcoming quarter, the consensus analyst forecast for Caterpillar is earnings of $4.90 per share on revenue of $16.26 billion.
Event-driven traders can recognize these historical trends to provide a strategic edge for trading. However, it's crucial to consider other factors, such as market conditions and company-specific news, when making investment decisions.
Investors and traders are advised to closely monitor Caterpillar's earnings announcement on August 5, 2025, and assess the potential impact on the stock price.
Based on historical trends, Caterpillar stocks might exhibit a negative one-day return after the earnings announcement on August 5, 2025, as seen in approximately 68% of cases over the past three years. However, it's essential to consider potential market conditions and company-specific news while making investment decisions, as historical trends do not guarantee future performance.
