Deutsche Bank analyst Nicole DeBlase expects infrastructure stimulus to be more of a 2018 "earnings tailwind" with legislation unlikely until the spring of 2017 at the earliest. She's skeptical that the rally in Machinery stocks can continue for an extended amount of time, but feels only 50% of the total benefit has been priced in, to date. Caterpillar (CAT) is the best way to play a U.S. infrastructure stimulus, DeBlase tells investors in a research note. She raised her price target for the shares to $102 from $95. The analyst also raised her price target for Buy-rated Oshkosh (OSK) to $72 from $65, for Hold-rated Deere (DE) to $95 from $90 and for Sell-rated CNH Industrial (CNHI) to $7.20 from $6.24.

JPMorgan raised the firm's price target on Caterpillar to $435 from $385 and keeps an Overweight rating on the shares ahead of the Q1 report. Construction data points are mixed, but demand commentary from manufacturers is generally optimistic, the analyst tells investors in a research note. The firm expects Caterpillar's multiple re-rating to continue on the back of resilient margin performance this year and expectations of earnings growth acceleration in 2025.