NEW YORK (TheStreet) -- Shares of Caterpillar (CAT) - Get Report were rising in late-morning trading on Tuesday as the stock's rating was increased to "buy" from "neutral" at Goldman Sachs earlier today.
The firm also raised its price target to $112 from $76 on shares of the Peoria, IL-based construction equipment manufacturer, the Fly reports.
Goldman said it now has an attractive view of the machinery industry as the market is finally bottoming out, Barron's notes.
The firm estimates that Caterpillar should see higher margins in the upcoming cycle with mid-cycle earnings per share of $8.
Earnings will be driven by a lower European footprint for the construction industry and expansion of the company's product line, the firm said.
Additionally, Caterpillar is reducing its research and development efforts and is allocating capital to its high-return products, Goldman noted.
Goldman also upgraded engine manufacturer Cummins (CMI) to a "conviction buy" from "neutral" and raised its price target to $162 from $134 on Tuesday, the Fly reports.
Separately, TheStreet Ratings objectively rated Caterpillar stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author.
TheStreet Ratings rated this stock as a "buy" with a ratings score of B-.
The company's strengths can be seen in multiple areas, such as its good cash flow from operations, expanding profit margins and solid stock price performance. We feel its strengths outweigh the fact that the company has had somewhat weak growth in earnings per share.
You can view the full analysis from the report here: CAT