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Shares of Caterpillar (CAT - Free Report) rose on Monday after a BMO Capital Markets analyst upgraded the construction equipment giant, just one day before it reports its second-quarter financial results.

BMO’s Joel Tiss said in a note to clients on Monday that he expects Caterpillar will be positively impacted by a surge in global construction, among other optimistic factors. Tiss raised his price target from $110 to $125 per share.

Caterpillar’s stock is up 1.43% through afternoon trading, and it peaked just $1.50 below its 52-week high earlier today. The company is currently a Zacks Rank #2 (Buy) and scored an A for Momentum in our Style Scores system.

“A strong rebound in demand is likely a 2018 occurrence at the earliest, and the stock has historically jumped in earnest 9-12 months in advance of a cyclical pickup,” Tiss wrote in a note to clients. “If this pattern repeats, the shares could trade to our upside scenario.”

According to MarketWatch, the BMO analyst also noted that he thinks shares of Caterpillar could “trade at a valuation that yields a long-term upside target for the shares in the range of $208 to $224.” If Caterpillar were able to double its stock price in the relatively near future, it would be an impressive move for a company with a market cap of $62.79 billion.

Tiss noted three major reasons why he raised his Caterpillar price target. The first factor was the possibility of a global recovery in the construction industry.

On top of that, the analyst pointed to Caterpillar’s push to cut cost and focus on profitability going forward. The company’s new CEO Jim Umpleby, who officially took over from former CEO Doug Oberhelman on January 1, is said to be driving this new cost-cutting initiative with a focus on making the company profitable for investors.

Other Construction Stocks

Caterpillar’s big upgrade on Monday has helped other companies in the infrastructure and construction industry.

Shares of infrastructure company MasTec, Inc. (MTZ - Free Report) , which operates heavily in the telecommunications sector, rose 2.65% through afternoon trading. The company reached just $0.40 below its 52-week high earlier today.

Vulcan Materials Company (VMC - Free Report) and Martin Marietta Materials, Inc. (MLM - Free Report) were both up marginally in afternoon trading. Quanta Services, Inc. (PWR - Free Report) , which works primarily with the oil, gas, and electrical industries, climbed 1.69%.

However, some of the bigger infrastructure ETFs have not felt a boost from Caterpillar’s upgrade. iShares U.S. Home Construction ETF (ITB - Free Report) , SPDR S&P Homebuilders ETF (XHB - Free Report) , and PowerShares Dynamic Building & Const ETF (PKB - Free Report) were all down marginally in afternoon trading.

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