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Shares opened broadly flat at $84.98 in New York.

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.

Diageo said on Friday that it is to acquire a 27.4% stake in USL for around £660m and announced a tender offer to buy an additional 26% stake (53.4% interest in total), which now means that the company generates 45% of revenues from emerging markets, "well on the way to the target of 50% by 2015", Nomura said. The broker said: "Announcement of this deal ahead of Diwali next week means that the celebrations can really begin, with the company gaining control whilst retaining a significant local minority interest." Nomura said that the deal represents a "very significant medium-term upside potential in India" for Diageo. USL's volumes last year matched Diageo's (121m cases of spirits), but the cost to buy the majority stake (£1.3bn) is a fraction of Diageo's enterprise value at over £50bn. "We see very significant opportunity to add value through premiumising local spirit and leveraging the distribution platform for international spirits, especially Scotch whisky." Meanwhile, Nomura said that a "likely" reduction in import tariffs on scotch could add over $400m to the profile pool for scotch in India (versus the current estimate of $40m) "with the company in a good position to capture the lion's share".

Credit Suisse has raised its target price for International Consolidated Airlines Group, otherwise known as IAG, but has retained its 'neutral' stance on the stock. After factoring in a lower fuel bill next year (given recent jet fuel spot price weakness) and 2% lower labour costs, the broker has raised its underlying earnings before interest and tax (EBIT) forecast for 2013 from €241m to €372m, though this is still 25% behind the Reuters consensus estimate of €495m. As such, the target price for the shares has been raised from 140p to 184p.

Victoria: Seymour Pierce downgrades from buy to hold, target cut from 300p to 200p.

SSE: Nomura cuts target from 1,270p to 1,265p, reduce rating kept.

Shanks: Jefferies downgrades from buy to hold, target cut from 108p to 95p.

RPS: Jefferies cuts target from 255p to 275p, buy rating kept.

Pace: Jefferies raises target from 206p to 230p, buy rating kept.

Ocean Wilsons: Seymour Pierce keeps buy rating and 1,670p target.

Microgen: Investec cuts target from 178p to 165p, hold rating kept; Westhouse Securities downgrades to add, target cut from 180p to 160p.

: UBS downgrades to neutral, target cut from 280p to 255p.

InterContinetnal Hotels: Exane BNP Paribase upgrades to outperform, target lifted from 1,630p to 1,900p.

IDOX: Investec raises target from 43p to 47p, buy rating kept.

IAG: Credit Suisse raises target from 140p to 184p, neutral rating kept.

G4S: Morgan Stanley downgrades to equal weight, target cut from 320p to 280p.

Experian: Jefferies cuts target from 1,200p to 1,150p, hold rating kept.

Dignity: Panmure Gordon raises target from 1,070p to 1,100p, buy rating kept; Investec raises target from 1,038p to 1,080p, buy rating kept.

Diageo: Nomura raises target from 2,000p to 2,100p, buy rating kept.

Dewhurst: Seymour Pierce raises target from 325p o 380p, buy rating kept.