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Following Goldman Sachs' Downgrade, Caterpillar Drops 4.3%

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Shares of Caterpillar Inc. (NYSE: CAT) took a hit in Monday's afternoon trading session, lower by 4.3 percent at the time of this publication. The drop follows Goldman Sachs's downgrade of the heavy equipment maker's stock to Sell from Neutral on expectations of lower returns on capital amid lower global infrastructure investment. Goldman Sachs' price target was also lowered, from $67 to $51.

On Monday afternoon, the Dow Jones industrial average traded nearly 70 points lower. The index had fallen 100+ points in Monday's late-morning trading session with Caterpillar significantly contributing to the index's decline.

Related Link: Goldman Downgrades Caterpillar To Sell

Jim Cramer Weighs In

The Street's Jim Cramer stated that this is an "excellent" downgrade, also adding that he 100 percent agrees with the analysts' premise. The downgrade also creates more challenges for the stock. Caterpillar warned that its growth would be hard to come by in 2016.

Caterpillar announced its restructuring plan in September, which would eliminate nearly 10,000 of its existing 115,000+ workers. A portion of its cost reductions are expected to take effect in 2016, with more savings anticipated in 2017 and 2018, according to Caterpillar.

Caterpillar's revenues are currently $55.148 billion.

The company reported quarterly revenues of $10.962 billion and net income of $368 million in its last quarterly report. The company's stock has an EPS of 4.82.

Latest Ratings for CAT

DateFirmActionFromTo
Oct 2016BarclaysMaintainsEqual-Weight
Oct 2016JefferiesMaintainsHold
Oct 2016Goldman SachsUpgradesNeutralBuy

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View the Latest Analyst Ratings

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