Caterpillar: stock falls on Morgan Stanley downgrade

(CercleFinance.com) - Caterpillar was a big loser in the Dow Jones (-2%) on Monday, hit by a downgrade from Morgan Stanley, which said it was concerned about the construction equipment manufacturer's business.


In a sector study released in the morning, the US investment bank said it had downgraded the stock to 'underweight' from 'equal weight', cutting its target price from $349 to $332.

Morgan Stanley explains that it is concerned by the decorrelation between the sector's fundamentals and its stock market performance, which the New York firm explains by the market's optimism regarding the health of the economy and the geopolitical situation.

In view of demand trends, rising inventories and intensifying competition, MS says it expects Wall Street's expectations for construction machinery manufacturers such as Caterpillar, Oshkosh and Terex to be downgraded.

Following these comments, Caterpillar shares closed down 2% on Monday in New York.


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