Analysts Are Downgrading These 5 Stocks

4. Caterpillar Inc. (NYSE:CAT)

Number Of Hedge Fund Holders: 54

One of the world’s largest construction-equipment manufacturers, Caterpillar Inc. (NYSE:CAT) is an American Fortune 100 corporation that manufactures and sells construction and mining equipment, diesel and natural gas engines, as well as industrial gas turbines and diesel-electric locomotives.

Bernstein analyst Chad Dillard downgraded Caterpillar Inc. (NYSE:CAT) to Market Perform from Outperform with a $195 price target on August 3. According to the analyst, the stock brings the risk of negative earnings revisions to his 2023 and 2024 estimates of 16% and 39%, respectively. He adds that “several signs point to order growth markedly slowing” in the second half of 2022 and that the company is “too reliant in the current environment on pricing to drive growth.”

According to the Insider Monkey database, 54 hedge funds had a combined value of over $4 billion in Caterpillar Inc. (NYSE:CAT) in Q1 2022. Bill and Melinda Gates Foundation Trust held the most prominent stake, with 7.35 million shares of the company worth $1.638 billion.

Here is what Diamond Hill Large Cap Concentrated Fund has to say about Caterpillar Inc. (NYSE:CAT) in its Q1 2022 investor letter:

“We also initiated a position in Caterpillar (NYSE:CAT), one of the world’s leading manufacturers of construction and mining equipment. It’s a company we know well, as we have owned it in our large cap portfolio for quite some time. Recent share price weakness provided an opportunity for us to add it to our large cap concentrated portfolio at an attractive discount to our estimate of intrinsic value. We believe Caterpillar stands to benefit from increased capital investment supported by a healthier/recovering end market environment, particularly in construction and mining.”