Analyst Downgrades Caterpillar Stock on Potential Headwinds

The security is down more than 10% year-to-date

Fernanda Horner

Digital Content Manager

Mar 27, 2023 at 10:19 AM

Caterpillar Inc. (NYSE:CAT) is down 0.2% to trade at $216.58 at last check, after Baird downgraded it to "underperform" from "neutral," and slashed its price target to $185 from $230. The firm cited a slowdown in nonresidential construction, which may worsen amid regional lenders' recent struggles, adding dealer stocking, backlog progression, cost spread, and dealer retail sales could also act as headwinds.

There's still room for pessimism to grow amongst the brokerage bunch, with six of the 16 analysts in coverage calling CAT a "buy" or better coming into today, while the 12-month consensus target price of $247.58 is a 15.1% premium to the security's current perch.

A floor at the 250-day moving average, which has been in place since late October, looks ready to contain today's pullback. Caterpillar stock is off 10.6% year-to-date after several bear gaps, however, as it continues to cool from its Jan.27, all-time time high of $266.04.

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