Baird analyst Mircea Dobre downgraded Caterpillar to Neutral from Outperform with a price target of $230, down from $290. The analyst believes the shares "are nearing a cyclical pivot point" following the strong recent outperformance. History shows that Caterpillar’s relative stock performance is driven by four fundamental factors: dealer stocking impact on sales growth, backlog progression, price/cost spread and dealer retail sales, the analyst tells investors in a research note. The firm believes all four elements are likely to become headwinds for future stock performance and sees risk for the stock’s valuation to contract toward the $180-$190 range.
Published first on TheFly
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