Al Root

UBS doesn't believe shares of the heavy-duty equipment maker Caterpillar have seen all the trouble that is om the way.

Monday evening, analyst Steven Fisher downgraded shares to Sell from Hold. He slashed his stock-price target by 37% to $243 from $385.

"There's more earnings downside related to macroeconomic headwinds that [are] not yet priced in," wrote Fischer. "The macroeconomic impacts of the tariffs and continued uncertainty will lead to further deterioration in multiple sectors of the U.S. and global economy, and believe this will weigh on the more economically sensitive parts of Cat's business, including some construction verticals, oil and gas, and mining."

In short, the near-term future for Cat, across much of its business, is bound up with tariffs and a potential general economic malaise.

He projects 2025 earnings per share of $17, down from an earlier call of $19.95. The Wall Street consensus EPS number is $20.13, according to FactSet. That number was about $22 a the time of the Nov. 5 presidential election.

Cat earned almost $22 a share in 2024.

It's a bearish view of the future, but the downgrade wasn't having a big impact. Cat stock was up 3.9% in early trading at $291 as the S&P 500 and Dow Jones Industrial Average both rebounded from their steep losses on Thursday and Friday.

Coming into Tuesday trading, Cat stock had fallen 16% since April 2, when Trump unveiled the latest round of tariffs. They were off 27% since the Nov. 5 presidential election.

With the downgrade, 14% of analysts covering Cat stock rate the shares at Sell. That is about twice as high as the average Sell-rating ratio for stocks in the S&P 500.

About 36% of analysts rate the shares Buy. The average Buy-rating ratio for stocks in the S&P 500 is about 55%.

The average analyst price target for Cat stock is about $377 a share. That hasn't changed much since the election.

Write to Al Root at allen.root@dowjones.com

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April 08, 2025 10:28 ET (14:28 GMT)

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