UPDATE: Buckingham Research Downgrades Caterpillar (CAT) to Neutral

(updated to add analyst comment)

Buckingham Research analyst Neil Frohnapple downgraded Caterpillar (NYSE: CAT) from Buy to Neutral with a price target of $140.00 (from $162.00).

The analyst comments "We are downgrading CAT to NEUTRAL from BUY and are reducing our price target to $140 (implies 6% upside) from $162 following weaker than expected 2Q19 results. We are lowering our 2019 EPS estimate to $12.10 ($12.35 prior) to reflect the Q2 miss versus out estimate (-$0.26), but maintained our 2020 EPS estimate of $12.55. While our 2H19 estimates did not materially change and we continue to believe that several of Caterpillar's end markets still have growth potential over the coming years (barring a global economic recession), we are struggling to identify a catalyst to drive the stock significantly higher from current levels in the near term. The "beat and raise" allure of CAT seems to be gone (missed 2 out of last 3 Q's), and we think the probability of lower earnings growth in 2020 (or even a decline) is rising as trade uncertainty and global growth concerns persist. We think these factors will continue to weigh on the trading multiple of CAT, and we believe the risk/reward profile is more attractive for other industrials such as United Rentals (URI, BUY, $170)."

For an analyst ratings summary and ratings history on Caterpillar click here. For more ratings news on Caterpillar click here.

Shares of Caterpillar closed at $132.00 yesterday.

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