Caterpillar Stock Crawls Lower After Downgrade

The analyst also cut its price target to $93 from $107

Deputy Editor
Apr 27, 2020 at 11:01 AM
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Shares of Caterpillar Inc. (NYSE:CAT) are down 2.5% to trade at $111.11, after a downgrade from Morgan Stanley to "underweight" from "equal weight," and a price-target cut to $93 from $107. The analyst predicted increasing pressure from a multi-year downturn in U.S. non-residential construction, as well as historically weak oil and mining commodity prices.

While CAT enjoyed an impressive rebound off its March 12 low of $87.50, it lost steam just below its 180-day moving average in early April. The stock has since gapped back below its 50-day moving average, which is creating even more pressure on the charts. Currently, the equity is down 22.8% year-to-date. 

Most members of the brokerage bunch were already pessimistic on CAT, coming into today, with 11 of the 15 in coverage calling the security a "hold" or worse. There is plenty of room for downgrades and/or price-target cuts, though. Four called CAT a "strong buy," while the 12-month consensus price target of $122.84 sits at a 7.7% premium to current levels. 

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