Shares of Caterpillar fell Thursday morning after Bank of America Merrill Lynch downgraded the company’s stock to neutral from overweight, arguing that sales growth is slowing after a strong 2017.

“Caterpillar’s monthly retail sales growth is beginning to slow, and appears to be past its peak,” analyst Ross Gilardi wrote Thursday. “Caterpillar saw across-the-board deceleration in all of its key regions, particularly in construction … comparatives become much more difficult in the next six months, as worldwide machinery sales were down 8 percent in January 2017.”

Shares of Caterpillar fell 2.2 percent in premarket trading following the analyst’s call. Its stock is up 41 percent over the past year, well ahead of the Dow Jones industrial average’s 14 percent climb over the period. It is the second-best performer in the index over the last 12 months.

The blue-chip company easily surpassed quarterly financial expectations last week, posting earnings per share of $2.82 against projections of $2.13. In the earnings report, the Illinois-based machinery manufacturer raised its 2018 profit outlook by $2 a share over the previous quarter, to a range of $10.25 to $11.25 per share.

Caterpillar’s stock fell shortly after, however, after executives noted that the first-quarter earnings would be the “high-water mark” for 2018.

Despite the strong set of earnings, Gilardi also cut his price target on the equipment manufacturer to $156 from $172, implying just above 8 percent upside over the next 12 months.

—CNBC’s Michael Bloom contributed to this report.