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UPDATE: Bank Of America Downgrades Caterpillar Inc.

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Analysts at Bank of America downgraded shares of Caterpillar Inc. (NYSE: CAT) from Buy to Neutral and lowered the price target to $121 from $125.

Bank of America analysts highlighted several reasons for the downgrade.

Ross Gilardi finds a lack of international growth from the firms operations, citing negative import growth in China, and Brazil recessionary struggles have slowed growth.

Initial investment thesis has come to fruition. Aalysts initially predicted that Energy & Transportation (formerly Power Systems) would be a “hidden” source of stability. Gilardi stated, “Following signs of an EPS bottom, we argued that CAT could re-rate to an historical 20x trough PE multiple. CAT now trades at 18.7x 2013 (trough) EPS and 17.0x 2014.

Analysts expect 2015 outlook to fall a bit short, expecting a gradual improvement in Mining to be offset by softer non-US construction.

Finally, Gilardi prefers Joy Global and Finning International for mining expose.

Shares of Caterpillar Inc. were down 1.5 percent.

Latest Ratings for CAT

DateFirmActionFromTo
Oct 2020StifelMaintainsBuy
Oct 2020Morgan StanleyMaintainsUnderweight
Oct 2020Wells FargoUpgradesEqual-WeightOverweight

View More Analyst Ratings for CAT
View the Latest Analyst Ratings

 

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Posted-In: Bank of America Ross GilardiAnalyst Color Downgrades Price Target Analyst Ratings

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