Construction and mining equipment manufacturer Caterpillar has been downgraded from ‘buy’ to ‘hold’ by global securities and investment banking group Jeffries.

Caterpillar’s price target has also been cut from $130 to $85, driven by a drop in construction markets outside the US and weak mining outlook in Europe, Africa, the Middle East and Latin America.

Jeffries cut its 2012 earnings estimate for Caterpillar by 50 cents to $9.40 and reduced the estimates for 2013 and 2014 by a
similar amount.

The brokerage said earnings of machinery comapanies are likely to be affected by a weaker Euro and slowing economic growth, reports Reuters.