Caterpillar (NYSE:CAT) Shares Down 3.8% on Analyst Downgrade

Shares of Caterpillar Inc. (NYSE:CAT) dropped 3.8% on Friday after Morgan Stanley lowered their price target on the stock from $915.00 to $675.00. Morgan Stanley currently has an equal weight rating on the stock. Caterpillar traded as low as $616.66 and last traded at $622.73. Approximately 5,135,546 shares were traded during mid-day trading, an increase of 80% from the average daily volume of 2,857,820 shares. The stock had previously closed at $647.39.

Other analysts have also issued research reports about the company. Weiss Ratings lowered Caterpillar from a “buy (b)” rating to a “buy (b-)” rating in a report on Thursday. Zacks Research downgraded shares of Caterpillar from a “strong-buy” rating to a “hold” rating in a research note on Monday, October 5th. Wall Street Zen raised shares of Caterpillar from a “hold” rating to a “buy” rating in a research report on Saturday, October 10th. Oppenheimer reiterated an “outperform” rating and set a $1,009.00 target price on shares of Caterpillar in a research note on Thursday. Finally, Freedom Broker upgraded shares of Caterpillar from a “hold” rating to a “buy” rating and set a $980.00 price target on the stock in a research report on Thursday, September 10th. Fifteen analysts have rated the stock with a Buy rating and twelve have given a Hold rating to the stock. Based on data from MarketBeat.com, the stock presently has a consensus rating of “Moderate Buy” and an average target price of $927.08.

Insider Buying and Selling

In related news, CEO Joseph E. Creed sold 32,401 shares of the firm’s stock in a transaction on Friday, August 28th. The stock was sold at an average price of $808.98, for a total value of $26,211,760.98. Following the completion of the transaction, the chief executive officer directly owned 34,555 shares of the company’s stock, valued at $27,954,303.90. This trade represents a 48.39% decrease in their ownership of the stock. The sale was disclosed in a document filed with the Securities & Exchange Commission, which is available through this hyperlink. 0.33% of the stock is currently owned by company insiders.

More Caterpillar News

Here are the key news stories impacting Caterpillar this week:

• Positive Sentiment: Caterpillar reported third-quarter sales and revenue of approximately $20.7 billion, up 17% year over year, while adjusted earnings per share of $7.20 exceeded the roughly $7.06 consensus estimate. Higher volume and pricing lifted margins, and the company deployed $2 billion toward dividends and share repurchases. Caterpillar Reports Third-Quarter 2026 Results
• Positive Sentiment: Demand tied to data-center infrastructure remains a major growth driver. Power-generation sales rose about 30%, and Caterpillar highlighted a record backlog of roughly $78 billion extending into 2029–2030, supporting expectations for continued revenue and margin growth. Caterpillar Posts Highest Sales Quarter Ever
• Neutral Sentiment: Several analysts still see upside from current levels. Truist reaffirmed its “buy” rating with a $1,027 target, while RBC assigned “sector perform” and Morgan Stanley assigned “equal weight.” However, both RBC and Morgan Stanley sharply reduced their targets to $722 and $675, respectively, signaling diminished confidence in near-term appreciation.
• Negative Sentiment: Revenue of $20.68 billion narrowly missed expectations of $20.76 billion, and management maintained its full-year sales outlook instead of raising it. The company expects only moderate fourth-quarter revenue growth, disappointing investors who had priced in a stronger benefit from AI-related infrastructure spending. Caterpillar Sales Jump, but Wall Street Wanted More
• Negative Sentiment: Rising tariff costs, higher inventories, extended backlog-conversion timelines and Caterpillar’s elevated valuation are adding pressure. Investors appear concerned that much of the AI-power opportunity is already reflected in the share price, making even strong results insufficient without a more optimistic forecast.

Hedge Funds Weigh In On Caterpillar

A number of hedge funds and other institutional investors have recently made changes to their positions in CAT. BlackRock Inc. acquired a new stake in shares of Caterpillar in the 2nd quarter valued at $40,457,153,000. State Street Corp increased its position in shares of Caterpillar by 4.0% during the 2nd quarter. State Street Corp now owns 36,276,960 shares of the industrial products company’s stock worth $37,120,529,000 after purchasing an additional 1,396,356 shares in the last quarter. Bank of America Corp DE bought a new position in Caterpillar during the 2nd quarter valued at about $5,818,150,000. Bank of New York Mellon Corp acquired a new position in Caterpillar in the second quarter valued at about $3,192,710,000. Finally, Legal & General Group Plc acquired a new position in Caterpillar in the second quarter valued at about $2,783,451,000. 70.98% of the stock is owned by institutional investors.

Caterpillar Price Performance

The stock has a market capitalization of $286.25 billion, a P/E ratio of 26.80, a PEG ratio of 1.22 and a beta of 1.58. The company’s 50 day simple moving average is $787.07 and its two-hundred day simple moving average is $807.56. The company has a debt-to-equity ratio of 1.65, a current ratio of 1.37 and a quick ratio of 0.85.

Caterpillar (NYSE:CAT) last announced its earnings results on Thursday, October 29th. The industrial products company reported $7.20 EPS for the quarter, topping the consensus estimate of $7.06 by $0.14. Caterpillar had a return on equity of 55.53% and a net margin of 14.51%. The business had revenue of $20.68 billion for the quarter, compared to the consensus estimate of $20.76 billion. During the same period in the previous year, the business earned $4.95 EPS. Caterpillar’s revenue was up 17.3% compared to the same quarter last year. As a group, equities analysts expect that Caterpillar Inc. will post 27.74 EPS for the current fiscal year.

Caterpillar Announces Dividend

The firm also recently disclosed a quarterly dividend, which will be paid on Thursday, November 19th. Shareholders of record on Monday, October 26th will be paid a $1.63 dividend. The ex-dividend date of this dividend is Monday, October 26th. This represents a $6.52 dividend on an annualized basis and a yield of 1.0%. Caterpillar’s payout ratio is currently 28.06%.

Caterpillar Company Profile

Caterpillar Inc is a manufacturer of construction, mining, and industrial equipment. Its product portfolio includes excavators, bulldozers, wheel loaders, motor graders, articulated trucks, and other machinery used in construction, infrastructure development, mining, quarrying, forestry, and related industries. The company also produces diesel and natural gas engines, industrial gas turbines, generator sets, and other power-generation and transportation equipment.

Caterpillar operates through businesses focused on construction industries, resource industries, and energy and transportation.