Goldman Sachs analyst Jerry Revich upgraded both Caterpillar (CAT) and Joy Global (JOY) to Neural from Sell after raising his Machinery coverage view to Neutral from Cautious.

The sustained recovery in China construction, which has driven iron ore spot 20% higher since February, was unexpected, Revich tells investors in a research note. This could drive a recovery in machinery share of mining capex, the analyst contends.

Revich raised his price target for Caterpillar shares to $78 from $62. The manufacturer of construction and mining equipment closed Friday down 33c to $78.33. The analyst's top picks in the Machinery space are Trimble (TRMB), Wabco (WBC), Allison Transmission (ALSN) and Paccar (PCAR).