Barclays analyst Adam Seiden downgraded Caterpillar (CAT) to Equal Weight from Overweight and lowered his price target for the shares to $155 from $170. The stock closed yesterday down $2.86 to $139.75 following its Q2 results.

The company's largest end-markets are no longer at trough, Seiden tells investors in a research note. Further, he believes Caterpillar's second half of 2018 price initiatives, directed towards offsetting supply chain and materials cost increases, will limit its ability to expand margins.

The analyst prefers shares of Deere (DE) and CNH Industrial (CNH), which he says are at similar valuations but are earlier in their market cycles. Seiden thinks Caterpillar's growth is already being appreciated at current valuation levels.