Best Industrial Stocks To Buy In June

Key Insights

• Analyst estimates for Caterpillar and Deere have moved higher in recent months despite worries about the health of the global economy. 
• Meanwhile their stocks have declined together with the broader market. 
• As a result, Caterpillar and Deere are trading at attractive valuation levels. 

S&P 500 has just moved to new lows, and the market is under broad pressure. Industrial stocks are not an exception and are moving lower together with the general market. However, earnings estimates for some industrial stocks have been moving higher in recent months while they remained under pressure, which can serve as a material upside catalyst when markets calm down.

Caterpillar

Analyst estimates for Caterpillar continue to move higher despite worries about the slowdown of the world economy. Currently, the company is expected to report earnings of $12.47 per share in 2022 and $14.5 per share in 2023, so the stock is trading at 14 forward P/E.

The key question is whether analyst estimates will remain at current levels at a time when markets are worried about the impact of the upcoming rate hikes from the Fed. In case analyst estimates stay near current levels, Caterpillar will have a good chance to gain upside momentum.

Deere

The situation is similar for Deere as analyst estimates have been improving in recent months. The company is expected to report earnings of $26.36 per share in the next year, so the stock is trading at 12 forward P/E.

Earnings estimates for both companies have been gaining ground as analysts believe that demand for their products will stay strong due to high prices for many commodities.

While Deere stock will likely remain under pressure in case the general market continues to fall at a robust pace, the stock could be among leaders during the rebound due to its attractive valuation.

To keep up with the latest earnings updates, visit our earnings calendar.