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Caterpillar downgraded on Obama’s energy policy

Caterpillar Inc.’s stock was downgraded to “Neutral” from “Overweight” by JPMorgan Chase & Co. analyst Ann Duignan Monday.

Duignan, who had rated Peoria-based Caterpillar “overweight” since April 2009, cited pressures on the sector to reduce costs and the potential negative impact on the U.S. coal and energy sectors following the re-election of President Barack Obama in downgrading the stock.

Mining remains “pressured as companies continue to assess their investment plans for the longer term, and cuts are becoming more broad-based,” Duignan said in a research note. “Additionally, the energy sector as a whole is likely to be under pressure from regulators, particularly here in the U.S. These catalysts point to an extended down-cycle of investment beyond 2013, and recovery in spending into 2014 is unlikely, raising the risk of negative earnings revisions into 2014.”

Duignan noted the overweight rating proved “the wrong call in 2012.” She cited the 6 percent decline in the stock this year, vs. the S&P Machinery sector, which is up 10 percent and the S&P 500, which is up 12 percent.

The stock closed up 23 cents Monday at $85.18.



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