Caterpillar downgraded to sell at Goldman Sachs

Shares of Caterpillar Inc. slumped more than 3% in premarket trade Monday after the company's stock was downgraded to sell from neutral at Goldman Sachs, with analysts forecasting "sustained lower returns" in the machinery industry. The brokerage axed its price target on Caterpillar to $51 from $67, which implies a more than 16% decline from Friday's closing price. Goldman analyst Jerry Revich also lowered his estimate on Caterpillar's 2017 earnings per share, to $3.20 from $3.41, now roughly 15% below the consensus view. He cited excess capacity and lower demand from commodity export countries, such as China, for the sliced outlook. Last quarter, Caterpillar partially blamed low economic growth in China for missing profit expectations and lowering its full-year outlook. The average rating on the stock among a survey of 20 analysts polled by FactSet is the equivalent to neutral, while the average stock target is $66.

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