CAT hit a record high earlier this month
Evercore ISI downgraded the machinery sector this morning, including blue-chip giant Caterpillar Inc (NYSE:CAT), which it cut to "in line" from "outperform." The firm cited the stocks' high valuation after a period of outperformance over the past two years, and raised CAT's price target to $338 from $321.
At last glance, Caterpillar stock was down 1.9% at $315.87. The stock hit a Feb. 5 post-earnings record high of $334.87, and is starting the week fresh off four-straight weekly gains. Since last February, CAT is up 27.4%.
Over in the options pits, puts have been more popular than usual. At the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), CAT's 50-day put/call volume ratio of 1.02 ranks higher than 89% of readings from the past year. This bearish sentiment seems to be continuing today, with 3,756 puts traded so far, in comparison to 3,119 calls.