Morgan Stanley downgraded CAT to "underweight" from "equal weight"
Shares of construction-equipment maker Caterpillar Inc. (NYSE:CAT) are 3.5% lower at $387.97 this morning, after suffering a bear note from Morgan Stanley. The Wall Street analyst downgraded CAT to "underweight" from "equal weight" and lowered its price target to $332 from $349, citing mounting pressure on the firm's construction industries segment and the equity's negative risk-reward profile.
Coming into today, analysts were divided on Caterpillar stock. Of the 21 in coverage, eight still carried a "buy" or better rating. This leaves room for more brokerages to adjust their rating on the security downward.
Option bears are popping off after the bear note. Specifically, 2,591 puts have traded hands already today, 2 times the average intraday volume. The October 400 call is the most popular, followed by the January 17, 2025 460 call.
On Friday, Caterpillar stock secured a new all-time high of $403.60, stretching its year-to-date lead to 31.5%. Now, the shares are contending with a familiar floor at the $388 level. Looking further back, CAT sports a 45.2% year-over-year lead.