** Brokerage UBS upgrades construction equipment maker Caterpillar CAT.N to "neutral" from "sell", raises PT to $357 from $272

** New PT a 2% upside to the stock's last close

** Brokerage sees upside for CAT following better-than-expected outcomes of U.S. trade discussions with China

** Brokerage expects CAT's earnings to decline by 15-20% in 2025, which is better than its previous estimate of 20-40%

** Brokerage projects that U.S. non-residential construction will grow by 4% in 2025, and CAT's North American construction machinery sales will grow by 3-4% in the second half of 2026

** "We think the more material downside sentiment is curtailed for now, and hold a more balanced view as policy gets finalized" - UBS

** Including session's moves, CAT stock down ~4% YTD

(Reporting by Padmanabhan Ananthan)

((Padmanabhan.Ananthan@thomsonreuters.com))