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CATERPILLAR STOCK FALLS DESPITE RATING UPGRADES - Capital Street FX

16-Mar
19:47 IST

Caterpillar’s stock is currently trading at 93.52-lower by 6.14% as compared to the previous closing price. In the pre-market trading session, the stock was trading lower by 9.93%. The stock has pared some of its earlier losses after the opening bell.

Investment bank Stifel upgraded the heavy equipment maker’s stock. The investment bank upgraded Caterpillar’s rating to Buy from Hold. Stifel, however, lowered the company’s price target to $137 per share from $140 a share. The investment bank said that Caterpillar’s share is at an attractive entry point following the recent pullback. Stifel further said that this year will be a difficult year for the heavy equipment maker, but Caterpillar has structurally improved its cash flow profiles and earnings which should cap earnings downside versus prior cycles.

The investment bank noted that during previous downturns, the heavy equipment maker has found chart support at a forward price to earnings ratio of 20 times. Stocks of Caterpillar have fallen about 38% Year-to-date.

On the technical front, the RSI is currently at 25.83% and suggests that the market can move in the downward direction. The current price is below the MA5. The current price is below the middle line of the Bollinger Bands and is heading downwards.

Overall Bias is Negative and short-term trades can be initiated with tight Stop Loss and Profit targets.

 

TRADE SUGGESTION- LIMIT SELL AT 94.20 TAKE PROFIT AT 90.20 STOP LOSS AT 96.20

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