Caterpillar downgraded to Underweight from Equal Weight at Morgan Stanley

Morgan Stanley downgraded Caterpillar (CAT) to Underweight from Equal Weight with a price target of $350, up from $283. While the quarter contained some clear positives, the negatives indicate a “steady deterioration” in Caterpillar’s fundamentals and skew the stock’s risk to the downside, the analyst tells investors in a research note. The firm says the quarter raised its level of concern heading into the company’s second half of the year. The market may be underestimating the risk to Caterpillar’s price and margins amid a deteriorating non-residential construction market, contends Morgan Stanley.