Shares of Caterpillar (NYSE:CAT) are down today, which can be attributed to an analyst downgrade. Mircea Dobre of Baird changed his rating from Buy to Hold while assigning a price target of $230 per share. For reference, his previous price target was $290.
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Dobre is concerned that Caterpillar shares are approaching a cyclical pivot point after outperforming recently. Indeed, investors tend to sour on cyclical companies when worries about a potential downturn rise. As a result, Dobre noted that there’s a “risk for valuation to contract toward the lower end of the [historical] range.” This would imply a P/E ratio between 11x to 12x.
Overall, Wall Street analysts have a consensus price target of $254.57 on CAT stock, implying only 3.42% upside potential, as indicated by the graphic above.
