Zacks Investment Research downgraded shares of Caterpillar Inc. (CAT) from OUTPERFORM to NEUTRAL on November 14, 2014, with a target price of $106.00.
Caterpillar's third-quarter earnings per share increased 15% to $1.72 as the company's incessant efforts to reduce costs largely mitigated the effect of lower mining-related sales on its profits. Even though Caterpillar lowered its revenue guidance to a range of $55 billion, it has raised its earnings outlook for the year to $6.50 per share. Caterpillar will benefit from recovery in the U.S. construction sector, cost reduction efforts, further share repurchases and backlog. However, lower locomotives sales, uncertainty around oil and gas and weakness in the mining industry remain headwinds. Hence, we have downgraded our recommendation on Caterpillar from Outperform to Neutral with a target price of $106.
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