Morgan Stanley Lowers Caterpillar Price Target Amid Concerns Over Order Peaks
Caterpillar (CAT) shares experienced a significant decline following its third-quarter earnings report, which revealed that bookings fell 11% from the previous quarter to $25.6 billion. While the company reported strong sales of $20.7 billion and record backlogs of $78 billion driven by AI and data center demand, investors reacted negatively to missed booking expectations and a cautious fourth-quarter outlook. Morgan Stanley has maintained an Equal-weight rating but slashed its price target for Caterpillar from $915 to $675. The bank cited risks regarding the durability of the data center power cycle and increased dealer de-stocking, which is expected to reach $1.6 billion in the fourth quarter. Despite these headwinds, construction sales remain robust due to North American demand and specialized infrastructure projects.
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