Morgan Stanley analyst has downgraded Caterpillar (CAT, Financial) from "Hold" to "Underweight." The target price for Caterpillar was revised down from $349 to $332 per share. This adjustment is based on a 16x valuation against projected earnings for 2025, rather than for 2024. Subsequently, the stock fell by 2.5% during pre-market trading and closed down by 2%.
Analyst Angel Castillo noted increasing caution regarding U.S. non-residential construction activities and Caterpillar's earnings outlook. The report indicated a rising possibility of reduced inventory levels for U.S. construction equipment, heightening the risk of further downgrades to Caterpillar's performance expectations.
