Caterpillar shares slide after Morgan Stanley downgrades stock to 'underweight'
This shift in outlook comes amid concerns about potential destocking within the company's Construction Industries segment and a revised price target of $332, down from $349.
Morgan Stanley's 2025 earnings per share estimate for Caterpillar is now projected to be 10% below consensus estimates, reflecting this cautious stance. Caterpillar's earnings are limited by offsets as per Morgan Stanley. CI segment challenges may not be sufficiently counterbalanced by tailwinds from mega projects and improvements in manufacturing costs, the brokerage said.
The analysts point to the possibility of lower construction industry volumes starting in late 2024 and reduced pricing in early 2025 as contributing factors to these revisions.
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