Morgan Stanley downgrades Caterpillar as tariffs begin to take their toll

Caterpillar's recent run higher is unsustainable and investors should steer clear of the stock as tariffs hit the business, according to Morgan Stanley. Morgan Stanley downgraded the construction and engineering equipment maker to underweight from equal weight in a Thursday note. It did raise its price target to $350 per share price from $283, though that still calls for more than 19% downside from Wednesday's close. Analyst Angel Castillo said that while shares have surged more than 50% from their April lows, both profitability and broader fundamentals have not kept pace, which he said points to potential "negative earnings revision risk." CAT YTD mountain CAT year to date "With shares priced for perfection, we now see a 2-to-1 negative risk/reward skew," the analyst added. Headwinds from