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Caterpillar Inc. (NYSE: CAT) has lost one of its long-time bullish supporters. Goldman Sachs downgraded the heavy equipment giant to Neutral from Buy in the daily top analyst upgrades and downgrades, and the firm lowered its target price by almost 20% to $130 from $156.

Goldman Sachs analyst Jerry Revich had maintained a Buy rating since late in 2016. What is interesting about this call is that some contrarian investors with longer-term views might wonder if this might signal the start of making a bottom in Caterpillar shares, if it is losing one of its biggest bulls.

Calling out an analyst downgrade as marking the bottom probably sounds overly cynical. That said, for decades investors have seen even the most well-known analysts upgrade and raise target prices on stocks close to the top and downgrade the stocks and cut target prices close to the bottom.

While the issues about China and slower global growth are well known, the Goldman Sachs downgrade cited concerns over lower resources demand and also that the construction business is in oversupply.

The report also noted that Caterpillar’s resource order recovery has slowed significantly, with the recovery petering out earlier compared with prior recovery cycles. To show the point further, Revich noted that segment revenue and orders are stabilizing at about an $11 billion run rate for 2019. While that is still a large number, the prior peak run rate was about $21 billion.

After it reduced dealer inventories at the trough, Revich was surprised that Caterpillar built up its construction industries dealer inventories in North America at the beginning of the North America construction season.

Despite the Dow Jones industrials and S&P 500 still being up in double-digits, even after the recent sell-off, the year-to-date performance of Caterpillar has been a drop of about 5%, and the decline over the past 12 months has been more than 13%.

Caterpillar shares closed down 1% at $120.78 on Wednesday. They were initially indicated down another 1.1% at $119.45 on Thursday, but on last look the stock was up by more than 0.7% to $121.71. Caterpillar has a 52-week range of $112.06 to $159.37, and its prior consensus target price was $144.74, according to Refinitiv.

It’s going to be too soon to say whether this downgrade was the last negative point, if you go further back in the recovery and expansion cycle. In early 2016, Caterpillar was down around $62, and the $180 cycle-peak high was just over $170 at the start of 2018.

At the start of 2019, the consensus target price on Caterpillar was $156.10. At the start of 2018, Caterpillar had been the Dow’s second-best performing stock of 2017 with a share price increase of 70%, and the $157.58 price at that time was above the 12-month consensus price target of $148.55.

To make matters stand out even further, Caterpillar is now valued at just about 10 times its blended 2019/2020 earnings per share consensus forecast from Refinitiv. It also comes with a 3.4% dividend yield that is about 100 basis points better than the 30-year Treasury and is even higher than the median of the dividend-paying stocks within the S&P 500.

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