Why Caterpillar Stock Slumped by Nearly 4% on Friday

Core Viewpoint - The current trade conflict and tariffs are expected to have a more significant negative impact on Caterpillar's business than previously anticipated, leading to a decline in stock price [1][2]. Financial Impact - Caterpillar now expects a tariff-related hit to its fundamentals totaling between $1.5 billion and $1.8 billion for the year, which is several hundreds of millions more than the original forecast of $1.5 billion [3]. - For the current third quarter, the company estimates the tariff impact to be between $500 million and $600 million [4]. Analyst Reactions - Following the disclosure of the revised impact, two analysts lowered their price targets for Caterpillar. Baird's Mircea Dobre adjusted his target to $495 per share from $500 while maintaining an outperform rating [5]. - Oppenheimer's Noah Kaye reduced his price target to $480 per share from $493 but also kept an outperform rating [5].