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).

Allison Transmission partnered with SANY, a global heavy equipment manufacturer for the mining and construction markets, to integrate the Allison 4970 Specialty Series transmission into SANY's STC5000 500-ton all-terrain crane. These new cranes will be in operation in remote areas of China including the desert and mountain terrain. "Our off-highway vehicles require a powerful transmission designed to meet the challenge of navigating difficult terrain," said Du Jian, R&D Director of Crane Chassis, SANY. "We selected the Allison 4970 SP due to its proven ability to increase vehicle productivity and maneuverability." In addition to SANY's STC5000 crane, Allison is also the propulsion solution provider for the company's SAC600E 60-ton crane.