On April 16, investment bank Morgan Stanley raised its rating on CAT to Equal Weight from Underweight. CAT stock sank almost 30% between mid-October and the investment bank’s upgrade on April 16.
On April 15, Caterpillar disclosed that its COO, Joseph Creed, would become CEO, effective May 1. Creed has been with the firm for 28 years. CAT’s CEO, D. James Umpleby III, will remain with the construction-equipment maker as its Executive Chairman.
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But CAT stock is only appropriate for longer-term investors, as it’s likely to “grind” higher, rather than surge “swiftly,” Simpson believes.
In addition to valuation, Morgan Stanley cited the company’s long-term, positive catalysts as a reason for its upgrade.
