JP Morgan, the investment bank which has carried an 'overweight' rating for US construction machinery maker Caterpillar since 2009, on Monday decided to downgrade the stock to 'neutral'.

"Mining capex remains pressured as companies continue to assess their investment plans for the longer term, and cuts are becoming more broad-based," said JPMorgan analyst Ann Duignan in research note. "Additionally, the energy sector as a whole is likely to be under pressure from regulators, particularly here in the US."

JP Morgan also lowered the stock's price target to $90 from $109.

"While the risk of further negative earnings revisions may already be priced into CAT's stock, we are concerned that the company doesn't have the balance sheet to support share repurchases as a means to bolster earnings," said Duignan.

Shares opened broadly flat at $84.98 in New York.

MG

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