Citi ups Caterpillar target, opens ‘negative catalyst watch’

Citi raised the firm’s price target on Caterpillar (CAT) to $460 from $435 and keeps a Buy rating on the shares. The firm also opened a “90-day negative catalyst watch” on the shares. It sees downside risk to second half of 2024 and 2025 estimates. The long-term fundamental view remains intact, but the stock “has gotten a bit ahead of itself” in response to Fed cuts and China stimulus, and solid commodity prices, all of which benefit Caterpillar at a lag, the analyst tells investors in a research note. Citi says its analysis of previous Fed cutting cycles suggests conditions for the company in the U.S. “could get worse before they get better.”